Elvira Nabiullina, the technocrat who heads Russia’s Central Bank, warns that Russia’s economy is in danger of overheating because it has ended up spending almost all of its resources on military action, Business Insider reports.

“The economy is growing so fast because it is using almost all the resources at its disposal,” Nabiullina warned at a press conference and in an official statement released after the central bank’s latest meeting in Moscow.

His comments came as Russia’s GDP grew 5.5% in the third quarter of this year after falling 3.5% in the same period last year, and unemployment hit a historic low amid many people being deported fight in the war in Ukraine or were employed in the Russian arms industry.

But Nabiullina warns that “stubbornly high inflation is proof that the economy has deviated from its potential and is unable to cope with a sharp increase in demand.”

Inflation in Russia rose again to 7.48% in November from 6.69% in October, according to official data. The Central Bank under the leadership of Nabiullina decided for this reason to conduct a new increase in the basic interest rate last Friday, which now reaches 16%.

Nabiullina’s central bank has raised its benchmark interest rate several times since mid-August after the ruble’s depreciation sparked outrage in Russia and drew rare criticism from the Kremlin and its propagandists as Vladimir Putin prepared for next year’s presidential election.

Elvira Nabiullina compares the Russian economy to a too fast car

However, the increase in the base interest rate was not enough to stop the widespread fall of the Russian national currency since the beginning of the year, when the ruble again approached the psychological threshold of 100 rubles to the dollar in early October.

Thus, on October 12, Putin ordered the government led by Prime Minister Mykhailo Mishustin to reimpose capital controls on exporters, a measure taken immediately after the start of the invasion of Ukraine, when Russia spectacularly collapsed.

This move stabilized the ruble, and this time even a high base interest rate cannot contain inflation as the Russian government spends huge sums on military operations.

“Imagine the economy as a car. If we try to go faster than the technical characteristics of the car allow, sooner or later the engine will overheat and we will not be able to drive a long distance. You can drive fast, but for a short time,” said Elvira Nabiullina at the press conference where she announced the new increase in the base rate.

“When the economy is overheated, it lacks the necessary production and labor resources, and the production of each new product is associated with increasing difficulties and increasing costs,” she added.

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