Russia’s economy showed more resilience than many US analysts anticipated, a point highlighted in a note by insider commentator George Glover, accompanied by his photo.
“When President Vladimir Putin’s troops moved into Ukraine in late February, Wall Street forecasters quickly warned of a downturn for Russia. Six months on, those predictions were revisited.”
Western sanctions—oil bans and excluding the ruble from key currency markets—had been expected to trigger a steep economic decline. Yet the data began telling a different story.
Economic growth persists
In March, JPMorgan projected that Russia’s GDP would drop 35 percent in the second quarter compared with the prior quarter. Goldman Sachs suggested the economy could enter its harshest recession since the Soviet era in the early 1990s.
But by June 30, GDP had fallen only about 4 percent year over year, a much smaller decline than feared. In fact, the pace of contraction after the COVID-19 shock in 2020 remained steeper. Analysts indicated the economy seemed to be absorbing sanctions with the possibility of a slower, prolonged downturn rather than a sharp collapse.
Industry data from the Bank for International Settlements note stronger export activity, especially in crude oil, supporting the economy. The International Monetary Fund also pointed to solid domestic demand and Kremlin programs aimed at lowering unemployment as factors helping the economy weather sanctions. IMF commentary from July highlighted domestic elasticity and a banking system less affected than feared.
How did oil exports rebound?
Many Western observers anticipated that bans on Russian oil would hit the country hard, given its position as a major energy exporter behind the United States and Saudi Arabia.
The International Energy Agency emphasizes Russia’s dependence on energy revenues, which accounted for a substantial share of the federal budget last year. The United States embargoed energy imports in March, while the European Union began a phased ban in May affecting a large portion of Russian crude purchases.
Goldman Sachs noted that finding new crude buyers could be challenging, especially as Russia’s central bank faced constraints with foreign exchange reserves after being cut off from the SWIFT system. Early reports indicated limited new purchases from China and little increase in oil imports from Iran or Venezuela in recent years.
Nonetheless, available data show Russia exporting about 7.4 million barrels of oil daily in July, with India emerging as a notable buyer. India’s intake rose for several months, though it eased slightly in June. Europe remained a significant market, importing about 2.8 million barrels per day, down from February levels but still sizable.
Production and services rebound
Wall Street previously signaled trouble for Russia’s manufacturing and services sectors under Western sanctions. The Russian composite index, reflecting activity across these areas, did decline after the Ukraine invasion. Goldman Sachs noted sharp drops in production, new orders, and related export indicators, suggesting further softness ahead.
Yet a few months later, the index resumed growth, indicating a recovery in overall economic health that contrasted with early doomster forecasts.
Alongside these developments, coverage of the conflict and defense strategies has drawn extensive analysis from international media. Reportage on Ukrainian resistance and strategic planning has highlighted civilian and military considerations, with researchers noting evolving doctrines aimed at integrated defense and resilience.
Observers stress that Kyiv is mobilizing a broad range of resources, including unconventional tactics, to bolster national defense. Retired officers and regional specialists have discussed how these approaches fit into wider security and strategic planning in Europe.