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How the Russian economy is defying and withstanding Western sanctions

Since Russia first invaded Ukraine in February 2022, Western media has frequently suggested that economic sanctions against the Russians are going to stifle the war effort or even bring the country to its knees.

As recently as early November, for example, the Wall Street Journal reported that "" were hurting the Russian economy and that the economic outlook "bodes poorly for Vladimir Putin's ability to fund Russia's war in Ukraine."

Credit agency is a good example of the sort of data being used to argue that sanctions are now starting to really hurt Russia.

The data is based on information provided by Russian companies willing to talk to them. Consequently, the survey could be drawing on a distorted sample.

The impact of mobilization

Nonetheless, media coverage also contains Russian government and other Russian-sourced statistics that highlight some of the economic problems confronting the country. One example is the impact that the has had on the Russian workforce.

The Russian daily —a sort of Russian Financial Times—has reported have lost workers due to them either being drafted to serve in Ukraine or fleeing the country to avoid it.

According to both Kommersant and the Wall Street Journal, a third of Russian companies have reported being hit with war-related labor issues. But Kommersant also went on to report that half of the Russian companies affected were able to rapidly adapt to new circumstances.

It wouldn't make much sense if Russia's economy hadn't been affected by unprecedented Western sanctions and the wider burden of the war. But media coverage of Western sanctions against Russia rarely mentions that Western economies are also struggling, due in part to those measures—.

Is Russia actually faring any worse? In some key areas, no.

Positive indicators

Russia's current economic situation has been helped by a bumper grain harvest this year. , giving it enough .

As in the West, in the double figures. But and better, in some cases, .

There is also evidence that in recent months, after spring highs.

There are other positive trends and areas in which the economic picture might improve for Russia, including the replacement of Western products and companies with Russian equivalents.

Businesses quickly replaced

Western icons like , but some have been replaced. McDonald's was bought out in Russia and renamed —meaning "tasty, full stop" in English.

As someone who recently visited Russia, I can personally vouch from recent visits to Vkusno i tochka restaurants in both Murmansk and Moscow that they're doing a brisk trade offering products that are essentially the same or very similar to McDonald's standbys.

There's been a lot of reporting in the West about how Russia is finding it . What's less frequently reported is the efforts the Russian government is making to try to deal with the problem.

Russia is working on , though Russian media has also pointed out it's facing . But even relatively easily sourced basic and older chips intended for consumer electronics can be used in the defense sector, as Russia adapts to new realities.

on the .

An under-estimated Russia?

The West seems to have under-estimated Russia's ability to withstand sanctions and Russian acceptance and understanding of difficult economic times.

As one Russian recently remarked to me: "We know why we're having to put up with inflation—do Westerners?"

Russian support for Vladimir Putin's leadership and . Anecdotal evidence from my many conversations with Russians from all walks of life in both Moscow and Murmansk in late October and early November certainly support this.

to avoid mobilization or to continue working for Western companies that have left Russia. The absence of this group leaves Russians more committed than ever to the war, given that .

In the face of recent Ukrainian battlefield successes, many Russians are finally waking up to the seriousness of the war in Ukraine.

. The Russian government slogan seems to be resonating for many in Russia who view the war as being about the protection of a Russian-speaking minority in Ukraine.

Russia's population as a whole is likely able to tolerate more economic hardship, given what Russians regard as being at stake. It remains to be seen if the same can be said for populations in Western Europe that are also struggling under the weight of Western sanctions.