The report aims to present a balanced assessment of Russia’s economic condition by the end of the third year of the aggressive war the Kremlin has unleashed against Ukraine.
Its general conclusion is that Russia has been able to withstand theblow caused by the Western sanctions due to a combination of factors,including its well developed market economy, its indispensable position asa supplier of primary commodities to the global market, highly professional responses by its government officials, and the West’s inability to isolateRussia on the international stage.
Since mid-2023, the Russian economy has undergone important structural changes: the military spending has increased, the geography of foreign trade has changed, and the citizens’ real disposable incomes has grown. Together, all this provide the Russian economy with strength and stability and made it capable of meeting the needs of Kremlin’s military machine in the years to come while providing the financial resources needed for funding welfare programs on a scale preventing an increase in protest sentiments.
The current stance can be described as a “growth without development” being characterized by a quantitative increase in the volume of production of long-mastered products, an expansion of the service sector, and limited modernization of infrastructure without significant technological progress.
For the international community, the most dangerous effect of current trends may be the rise of a Russia-centered group of economies championing massive violation of intellectual property rights, illicit foreign trades and the use of non-traditional forms of international settlements. The Kremlin sees opportunities for institutionalizing this model and is laying it down as the basis for its geopolitical claims, trying to establish itself as a leader of a “non-Western” community of nations.
An unbiased assessment of Russia’s economic capabilities presented in the report excludes almost any chances of a serious crisis caused by internal factors in at least three-to-five-years perspective.
