Russia and Ukraine have been at war since February 2022, when Russia invaded and annexed Crimea, a peninsula in the Black Sea that belonged to Ukraine. The war then spread to the eastern regions of Ukraine, where pro-Russian separatists, backed by Russian troops and weapons, fought against the Ukrainian government forces. The war has claimed more than 20,000 lives, displaced more than 2 million people, and damaged the infrastructure and economy of both countries.
The war has also drawn the involvement and condemnation of the international community, especially the United States and its allies, who have supported Ukraine’s sovereignty and territorial integrity, and imposed a series of sanctions on Russia for its aggression and violation of international law. The sanctions have targeted Russia’s key sectors, such as energy, finance, defense, and technology, as well as its political and military leaders, and have aimed to isolate and pressure Russia to end the war and respect the peace agreements.
The Economy of Russia During the War
Despite the war and the sanctions, Russia’s economy has surprisingly grown and prospered in the past three years, according to the data and analysis from various sources, such as the International Monetary Fund (IMF), the World Bank, and the Swiss banking giant UBS. Russia’s gross domestic product (GDP) increased by 2.5% in 2022, 3.2% in 2023, and 4.1% in 2024, while its foreign exchange reserves rose by $100 billion, reaching a record high of $700 billion.
The growth and prosperity of Russia’s economy during the war can be attributed to several factors, such as:
The diversification and modernization of Russia’s economy, which has reduced its dependence on oil and gas exports, and increased its production and innovation in other sectors, such as agriculture, manufacturing, and services. Russia has also invested in its human capital, infrastructure, and digital transformation, and has improved its business environment and competitiveness.
The adaptation and resilience of Russia’s economy, which has weathered the shocks and challenges of the war and the sanctions, and has benefited from the opportunities and advantages of the global markets. Russia has also strengthened its fiscal and monetary policies, and has maintained its macroeconomic stability and growth.
The cooperation and integration of Russia’s economy, which has expanded and diversified its trade and investment partners and products, and has participated and contributed to the regional and international initiatives and agreements, such as the Eurasian Economic Union (EAEU), the Shanghai Cooperation Organization (SCO), and the Regional Comprehensive Economic Partnership (RCEP).
Keep Reading
The Role of the US in Russia’s Economy
The US, which has been the main adversary and critic of Russia during the war, has paradoxically also been a factor and a source of Russia’s economic growth and prosperity, according to some experts and observers. The US has indirectly and unintentionally helped and boosted Russia’s economy in the following ways:
The stimulus and inflation of the US economy, which has increased the demand and the prices of oil and gas, and other commodities, which are the main exports and revenues of Russia. The US has also weakened the value and the dominance of the US dollar, and has increased the attractiveness and the use of other currencies, such as the euro and the yuan, which are preferred by Russia.
The withdrawal and isolation of the US from the world, which has created a vacuum and a space for Russia to fill and exploit, and to increase its influence and presence in the region and the world. The US has also alienated and antagonized some of its allies and partners, such as Turkey, Germany, and India, who have turned to or cooperated with Russia on some issues and interests.
The innovation and competition of the US in the technology sector, which has stimulated and challenged Russia to develop and improve its own technology sector, and to compete and collaborate with the US and other countries on the cutting-edge and emerging technologies, such as artificial intelligence, biotechnology, and space exploration.
