Many factors will restrict Russia’s recovery in 2023

Significance

This turnout was a far milder contraction than the many assessments made at the outset of the invasion of Ukraine of its likely impact on the Russian economy. It prompted a public debate on the effectiveness of sanctions. However, the aggregated data conceal the direct impact on key sectors and the growing risks of financial instability.

Impacts

• Sanctions imposed on Russia have led to a reconfiguration of global trade in energy and agricultural products.
• The risk of secondary sanctions for Russia’s trading partners will increase in 2023.
• Slowing global growth will limit the prospects of economic recovery.
• The war in Ukraine will speed up the process of ‘friendshoring’.