Why Is Russia’s Economy Still Growing?

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Western sanctions over the war in Ukraine have had limited impact.

By Cameron Abadi, a deputy editor at Foreign Policy, and Adam Tooze, a columnist at Foreign Policy and director of the European Institute at Columbia University. Sign up for Adam’s Chartbook newsletter here.

A man walks past a currency exchange office in Moscow.

A man walks past a currency exchange office in Moscow on June 13. NATALIA KOLESNIKOVA / AFP

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The United States and G-7 announced a slate of new economic punishments against Russia, adding to existing imposed sanctions in response to the invasion of Ukraine. Yet despite it all, the Russian economy is expected to grow this year at a rate of 3.2 percent, according to the International Monetary Fund (IMF)—compared to the 2.7 percent growth forecast for the United States. Russia’s relative economic success comes seemingly as the result of a decision to orient the Russian economy toward supporting the military—an intertwining that could intensify under Russia’s new defense minister, and economic intellectual, Andrei Belousov.

Cameron Abadi is a deputy editor at Foreign Policy. Twitter: @CameronAbadi

Adam Tooze is a columnist at Foreign Policy and a history professor and the director of the European Institute at Columbia University. He is the author of Chartbook, a newsletter on economics, geopolitics, and history. Twitter: @adam_tooze