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Significance The war in Ukraine, Western sanctions and the redirection of external trade away from Europe towards new partners all required a surge in investment. The bulk of new investment has been channelled towards economic restructuring rather than improving productivity, which is needed if there is to be a significant increase in the country’s growth potential. Impacts Increased investment in the defence industry will enable higher volumes of arms production. Increased public investment will add to inflationary pressures. High levels of public investment will partially mitigate the lower availability of bank credit caused by monetary tightening.
A Fri, study studied this question.