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Significance

This turnout was a far milder contraction than the many assessments made at the outset of the invasion of Ukraine of its likely impact on the Russian economy. It prompted a public debate on the effectiveness of sanctions. However, the aggregated data conceal the direct impact on key sectors and the growing risks of financial instability.

Impacts

Sanctions imposed on Russia have led to a reconfiguration of global trade in energy and agricultural products.

The risk of secondary sanctions for Russia’s trading partners will increase in 2023.

Slowing global growth will limit the prospects of economic recovery.

The war in Ukraine will speed up the process of ‘friendshoring’.

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