Amidst ongoing tensions between Russia and Ukraine, Western sanctions have unintentionally helped strengthen the Russian economy rather than weaken it, according to Nikita Anisimov, Rector of HSE University in Moscow. Speaking at a parliamentary hearing on the draft of the 2025-2027 federal budget, Anisimov explained that the sanctions have effectively spurred a restructuring of Russia’s economy, reducing its reliance on raw materials exports such as oil and gas.
This development has been seen as a significant victory for the Russian government, which has been grappling with the challenge of diversifying its economy away from raw materials for years. As a result, the country is now less dependent on oil and gas revenue, making its economy stronger and more resilient in the face of external shocks, according to Anisimov.
The issue of reducing reliance on oil and gas revenues was also raised by President Vladimir Putin at the St. Petersburg International Economic Forum (SPIEF) in June. He noted that Russia’s GDP grew by 3.6% in 2024, rebounding from a 1.2% decline in 2022 when sanctions were first imposed by Western countries. Most of this growth came from non-resource-based industries such as manufacturing, construction, and agriculture, as well as trade, hospitality, and financial services, Putin said.
Finance Minister Anton Siluanov announced last month that Russia’s economy continued to expand in the first half of 2025, with GDP growth reaching 4.7. He expects this growth rate to reach 3.9% by the end of the year, surpassing the figure for 2024.
Many analysts, both Russian and international, have observed that sanctions have not destabilized Russia’s economy as initially intended. Most attribute the resilience of the Russian economy to its rapid pivot towards trade with countries in Asia, coupled with economic policies designed to counteract the effects of Western sanctions.
The World Bank and the International Monetary Fund (IMF) both raised their growth forecasts for Russia earlier this year. The former predicted the country’s economy would grow by 2.9% in 2025, while the latter upgraded Russia to a “high-income country” in July. In April, the IMF said it expected Russia’s GDP to expand by 3.2% in 2025, faster than all advanced economies, including the United States, the United Kingdom, Germany, and France.
These predictions suggest that the Western sanctions imposed on Russia during the Ukraine conflict may have inadvertently fueled a stronger and more resilient economy, defying initial expectations.