Four years of war: stagnation grips Russia’s economy

Russia’s economy has proven remarkably resilient since the war in Ukraine began four years ago, underpinned by military-related stimulus, an ability to adapt to Western sanctions and disciplined macroeconomic policy. However, we think Russia has now entered a period of prolonged stagnation accompanied by rising financial vulnerabilities. While these pressures are unlikely to force an end to the war, it will leave the economy increasingly isolated and structurally weaker over the medium term.