1. How Russia is Surviving Western Sanctions?
Martin Gilman
Professor of Economics
Higher School of Economics University, Moscow
How Russia is Surviving Western Sanctions?
March 11, 2019

2. A caveat: views of an American economist observing the Russian economy
A caveat: views of an American economist observing the Russian economy from within the Moscow Ring Road
In considering the economic effects of the multiple rounds of general and targeted sanctions against Russia since March 2014, there are 3 general themes:
The macroeconomic data are ambiguous. It’s logical to assume that sanctions negatively affect Russian economic performance as various studies have shown, but we don’t have a valid counter-factual. Nevertheless, the Russian economy seems to be gradually recovering since the trough of 2015.

3. Most Russians now assume that sanctions have become a permanent feature of US foreign policy. Moves are underway to reorient the Russian economy to become more autonomous and resilient. No doubt at considerable cost in terms of economic efficiency, it should be able to cope with further sanctions.
The consequences of this re-orientation can be counter-productive over time to Western interests as well as unfortunate within Russia itself – but not in the way that the sponsors of the sanctions probably anticipated.

4. Russian nominal GDP in US$ terms
Source: Rosstat, Gavrilenkov & Kudrin

5. Russia: Real interest rates

6. Russia: Real exchange rates

7. Russia: Trade data and current account
annual data, $ billion

8. Russia: Retail sales and disposable income
quarterly data

9. Russia: Labor and wage trends
quarterly data

10. Russia: Federal budget, % of GDP

11. Russia: Monetary aggregates, % of GDp, Annual data

12. MOEX Russia index

13. RUSSIA: Importance of investment as GDP growth driver
RUSSIA: Importance of investment as GDP growth driver will increase substantially in coming years

14. Current account balances in selected countries, $ billion

15. Countries that have introduced sanctions against Russia, its citizens or Enterprises, 2017

16. Central Bank of Russia Currency composition of reserves

17. Main goals of the Russian Federation May 2018

18. Acknowledgement
I am grateful to Evgeny Gavrilenkov and Alexander Kudrin for data, as well as the Research staff of Sberbank CIB.