Geostrategic magazine

Un quadro dell’economia russa (Boris Grozovski, Wilson Center)

The September−October enlistment drive has done to the Russian economy what the West’s sanctions have so far failed to do. The real estate market, demand for credit, and consumer sentiment all show a noticeable decline. Absent oil and gas revenues, the federal budget would be in deep deficit. Russia’s brainwashed citizens are starting to suspect that the war is eating away at their well-being. The recession will continue in 2023. In the fall of 2022, the Russian army, effectively defeated in Ukraine over the spring and summer, needed a serious influx of soldiers. According to the official count, 318,000 men were drafted, or nearly 1 percent of those liable for military service—and that figure is likely an underestimate. Even more people, up to 1.5−2 times as many and predominantly men, have left the country to escape the draft. Many have lost their incomes and have had to reconsider their investments and consumption patterns. Yet the Russian economy has proved quite resilient to war and sanctions. In April and May most forecasters expected Russia’s GDP in 2022 to fall by 7−8 percent, while some predicted a 12−15 percent fall. Investments were expected to go down by 25−28 percent and retail trade by 8−9 percent, while prices were expected to rise by 20−25 percent. Russia’s GDP grew 4.7 percent in 2021, and this was another argument for a sharp recession owing to a high base effect.

Russia’s Economy at the End of 2022: Deeper Troubles | Wilson Center