The Russian economy witnessed considerable economic strain following Russia’s invasion of Ukraine and the imposition of sanctions by the United States and its partners.
This led to a contraction of the Russian economy in 2022 by 2.1%, driven by a 14% contraction in exports and an 11% decline in imports over 2021, among other factors.
Austerity measures were imposed, and defence spending was prioritised. Financial sanctions on Russia, export controls, and a price cap on Russian oil have made it more difficult for Moscow to source key high-tech components and other needed inputs.
The ruble depreciated (roughly 20% against the dollar from early February 2022 to December 2023), inflation rose, and the labour market constricted. The average Russian saw a significant decline in living standards during this period.
Higher oil exports, however, have helped offset further economic contraction.
