Russia's Economy Grows Amid Sanctions, Faces Long-Term Challenges

Despite sanctions and military spending pressures, Russia's economy shows resilience with growth, but long-term sustainability remains uncertain.

Despite facing unprecedented sanctions, Russia's economy grew by 3.6% last year and is expected to grow by about 3% this year, largely due to high military spending.
The effectiveness of Western sanctions is debated, with some sectors of Russia's economy adapting and finding new markets, particularly in China and India.
Russia's increased military spending, which is expected to rise to 6% of GDP this year, is putting pressure on its budget deficit and could lead to further inflation.
The loss of Western technology and key supplies, along with a demographic challenge and the exodus of young people, is expected to impact Russia's productive capacity over time.
Observers note that while sanctions may not have had an immediate crippling effect, their impact is expected to intensify, affecting Russia's industrial and technological capacity.