Chatham House
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The ‘Fortress Russia’ economy has adapted well to pressure. But stagflation presents an opportunity for the West
Now could be the time to ratchet up sanctions pressure on Putin and change Moscow’s risk analysis of prolonging the war.
The Russian economy has proven much more durable through three and half years of full-scale war in Ukraine, and a decade of Western sanctions, than many would have expected.
Expectations of a collapse in the Russian economy were widespread in 2022, as the West initially rolled out extensive sanctions in the aftermath of the full-scale invasion. That collapse did not transpire. The Russian economy has continued to function, even prosper. While suffering a 1.4 per cent real GDP contraction in 2022, it grew in real terms by over 4 per cent per annum over the next two years.
Explanations for the durability of the Russian economy are numerous. But a number of important factors have contributed.
Original article link: https://www.chathamhouse.org/2025/09/fortress-russia-economy-has-adapted-well-pressure-stagflation-presents-opportunity-west
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