Why is Russia's economy booming despite sanctions?

Over two years on from the invasion of Ukraine, Russia is the most sanctioned nation in the world. And yet the country’s economy is set to grow faster than any G7 democracy this year. How is this possible?

Back in 2022, Boris Johnson vowed to ‘squeeze Russia from the global economy piece by piece, day by day and week by week’. President Joe Biden promised that sanctions would ‘impose a severe cost on the Russian economy, both immediately and over time’.

Russians are spending more on restaurants, white goods, and even property – they have never had it so good

Yet these dire warnings never materialised: Russia’s economy has proved resilient in the face of sanctions. Moscow’s flexibility in restructuring its trading relationships and domestic demand has allowed it to weather the storm. Since 2022, China has steadily replaced the European Union as Russia’s primary trading partner and tech supplier. At home, meanwhile, the increase in military spending has given a significant stimulus to the broader economy.