World
Russia's Short-Term Resilience and Long-Term Vulnerabilities
— 2 mins read
Moscow is short of almost 5 million workers
Russia's economy has survived four years of Western sanctions without collapsing, but growth has crashed from over 4% in 2023 and 2024 to around 1% in 2025.
How Moscow dodged the knockout blow
Western sanctions began in late February 2022, after the full-scale invasion of Ukraine. Early forecasts from the IMF, the World Bank, and major Western banks predicted a slump of 8% or more. Instead, the economy shrank by roughly 1.2% to 2.1% that year, according to the EU's own assessment of sanctions impact.
Moscow redirected its oil. Around 93% of Russian crude now goes to China, India, and Turkey. Much of it travels on a shadow fleet of tankers used to dodge the Western price cap, according to analysis by the Centre for Research on Energy and Clean Air. By early 2026, Russian oil export volumes had climbed back above pre-war levels, despite a dip in 2025. Capital controls, parallel imports from third countries, and heavy state direction kept supply chains running.
Growth bought with war money
Official GDP grew 4.1% in 2023 and between 4.1% and 4.9% in 2024. Then it stalled. The World Bank puts 2025 growth at around 1%, with 2026 forecast at roughly the same.
The boom was bought with military spending worth 7.2% to 7.8% of national output in 2025, according to research institute SIPRI. Some independent estimates put the true figure closer to 10% once hidden items are counted.
Russia is short of between 2.2 million and 4.8 million workers. Moscow is now recruiting from India to fill the gaps.
The Bank of Russia raised its key interest rate to 21% in 2025 to fight inflation driven by war spending. It had cut the rate to 14% by July 2026, with inflation running at about 5.9%. Budget deficits have widened as defence spending rises.
Not enough workers left
Russia is short of between 2.2 million and 4.8 million workers, according to official and business survey estimates. More than 300,000 men were mobilised in 2022. Between 500,000 and one million working-age Russians have left the country since the invasion. Moscow is now recruiting workers from India to fill the gaps, Deutsche Welle reported.
The same story as Iran and Venezuela
Sanctions on Iran and Venezuela produced a similar pattern: an initial slump, then adaptation through third-country trade and state control, then years of lost output. Russia now depends on a far narrower set of trading partners, leaving it exposed if Beijing or Delhi change their terms.
Aviation, car manufacturing, and high-tech sectors have seen sharp falls in output and investment. Technology sanctions still block access to advanced semiconductors, and parallel imports are lower-quality substitutes.
The United States remains central to enforcement, leading on secondary sanctions against firms that help Russia evade restrictions.
