When Russia attacked Ukraine in February 2022, economic sanctions imposed by the West since 2014 due to its annexation of Crimea were further intensified, effectively ostracizing Russia from the global economic system. To force Russia to withdraw, the G7 countries and the EU not only froze $300 billion worth of Russian assets globally, but also cut off Russia's access to Western financial markets by removing it from the World Union for Interbank Financial Telecommunications (SWIFT) system and blocking its access to foreign exchange reserves. They forced Western giants to leave the country, banned the export of high-technology products, and implemented policies aimed at preventing oil exports. The aim of these sanctions was to isolate the Russian economy, weaken its fighting capacity, and force it to the diplomatic table. Indeed, commentary during the initial stages of the war focused on how Russia would withstand such massive economic sanctions. Commentary largely focused on the possibility that Russia would face a serious financial crisis within a few months.
How does Russia, whose military spending has skyrocketed while the economy of every country facing conflict with the West, especially the US, is holding its own against these sanctions? Can we explain this resilience solely through the presence of natural gas or oil? This question has been on my mind this week. It's worth looking at the numbers first. According to official World Bank data, Russia's Gross Domestic Product (GDP) will reach $2,173.84 billion in 2024. Russia's GDP represents 2.05 percent of the global economy. Compared to 2022, this figure is expected to increase by 6 percent in 2024.
The World Bank projects Russia's GDP per capita in purchasing power parity to be $41,704 in 2024, compared to the EU average of $62,660. In a country at war and subject to major sanctions, the purchasing power of the population appears to have remained largely unchanged. According to the Russian Federal State Statistics Service, core consumer prices in Russia reached an all-time high, rising by 20.37 percent in April 2022. This figure reached 9.55 percent in June 2025. Considering that the global inflation rate was 5.9 percent in 2024, it can be concluded that Russia's inflation figures during the war were not particularly high.
The Russian Federal State Statistics Service reported the unemployment rate in Russia as 2.2 percent in July 2025. This figure was 4.1 percent in February 2022. Military mobilization in Russia and the diminished capacity of the Russian economy are major factors in this decline. The Central Bank of Russia announced Russia's external debt as $323 billion in the second quarter of 2025. This represents a 30 percent decrease compared to 2022. Numerous Western reports claimed that Russia was unable to pay interest on its external debt during the first year of the war. While Russia explained that the main reason for this was the systemic sanctions imposed, the commentary on these news items focused on Russia's bankruptcy. Russia quickly made all its payments.
Russia ranked 7th among global exporters in 2024. This demonstrates its dominant role in international energy and raw material markets. Crude oil, natural gas, and refined petroleum products constitute the largest portion of Russia's exports, with the value of these products exceeding $200 billion. According to export-import data published by the Russian Federal Customs Service, Russia's trade surplus increased by 7.8 percent in 2024, reaching $150.9 billion. Russia's merchandise exports increased by 2 percent to $433.9 billion, while imports decreased by 0.8 percent to $283 billion.
Russia's total foreign trade increased by 0.9 percent in 2024, reaching $716.9 billion. Asian countries increased their trade with Russia by 5.4 percent in 2024, accounting for 72.6 percent of the total. African countries' share rose to 3.9 percent, while trade increased nominally by 13.2 percent. The Americas' share fell to 3.7 percent, and trade volume decreased by 1.7 percent. Europe, on the other hand, accounts for 19.7 percent of Russia's total foreign trade. Likewise, Europe's share of Russia's exports has not been negligible. Russia's exports to Europe in 2024 fell by 20.4 percent to $68.4 billion. Countries such as the Netherlands, Germany, the United Kingdom, and Italy remain among the top 10 Russian exporters.
Russia's exports to Asia increased by 7.6 percent, reaching $329.2 billion. China, which accounts for a significant 33 percent of Russian exports with $142 billion, holds the lion's share. The country's exports to Africa increased by 14.7 percent to $24.3 billion, and to the United States decreased by 1.7 percent to $11.9 billion. Russia's imports from Europe in 2024 are projected to decrease by 6.9 percent to $73.1 billion, imports from Asia by 1.9 percent to $191.2 billion, imports from Africa by 3.5 percent to $3.5 billion, and imports from the United States by 1.8 percent to $14.8 billion.
Despite such harsh sanctions, Russia managed to keep its economy afloat. The ruble recovered, energy revenues remained stable, and most importantly, it developed alternative trade and financial channels. How did this happen? After the annexation of Crimea, Russia, facing the first sanctions, faced a challenging period and was forced to make significant financial decisions. To restructure its economy and reduce its external dependence, it turned to domestic production. Agriculture was a key driver in this shift, and Russia quickly became the largest wheat exporter.
During this process, it prioritized energy supply security and balanced its export dependence on the West with Asia. It signed new agreements with major Asian importers like China and India, which were always hungry for energy. These agreements enabled these countries to purchase Russian energy at lower prices while also allowing Russia to maintain its energy revenues. Russia's continued energy exports were the most significant factor in its economic stability. During this process, Russia effectively leveraged Europe's energy dependence, and according to the export figures I mentioned above, major European countries remain important export partners of Russia. This situation, combined with the balance between Asia and Russia, reduced the impact of Western investments.
While being excluded from the SWIFT system may seem like a major blow to Russia, it has also led to a Russia that is turning to developing alternative financial systems. Trade agreements in national currencies were signed with countries that did not invest. Furthermore, a national payment system similar to China was introduced. This system ensured the continuity of payments in the domestic market. Thus, the impact of the war on the domestic market was reduced. In addition to measures taken against exports, Russia adopted policies that encouraged domestic production in response to import restrictions. Domestic production was encouraged and significant investments were made in the defense industry, agriculture, and technology production. These investments led to a significant increase in production, with the goal of achieving self-sufficiency in these sectors.
Military spending reached $2.7 trillion in 2024 due to the impact of the Russo-Ukrainian war and other armed conflicts and geopolitical tensions. The 9.4 percent increase in total military spending in 2024 pushed military spending to its highest level in the world. For a country embroiled in war, the defense industry must be a key sector, and this remained true for Russia. The Stockholm International Peace Research Institute (SIPRI) identified 64 countries as major arms suppliers in 2020-24, but most of these are smaller suppliers. The top 25 suppliers account for 98% of total export volume, and the top five (the US, France, Russia, China, and Germany) account for 71%.
According to SIPRI, Russia's arms exports halved between 2015-2024 and 2020-24, falling to a level far below any five-year period in its history (or any five-year period since its predecessor, the Soviet Union, began in 1950). In response, Russia has greenlit technology transfers for some of its production lines and increased its sales to China, India, and some Arab and African countries. According to 2025 data, Russia accounts for 7.8% of global arms sales. In addition, investments in agriculture, the defense industry, and technology production increased the need for labor and supported employment. Global brands that had emerged from the country were replaced by domestic brands. The public's perception of "we are at war and alone" allowed these companies to maintain their market presence. In other words, the Russian people were forced to change their consumerism. Meanwhile, a China emerged that more than filled the West's shoes. They completely dominated the Russian automobile market, in particular.
Meanwhile, we should not forget the decisions taken by the Russian Central Bank. They increased interest rates to suppress inflation. While the ruble initially depreciated, it later stabilized with subsequent policies. The dependence on the dollar and euro was reduced to counter foreign exchange shortages. The use of the Chinese yuan and the Indian rupee was encouraged. Russian capital fleeing the West found opportunities to invest in Qatar, China, and India.
Let all this not create the impression that there are no problems in Russia. Likewise, the decline in the welfare of the middle class is clearly evident. However, the general public perception is that the government took the right steps in response to these sanctions without panicking. Ultimately, it's clear that economic sanctions won't get Russia to negotiate. The war Trump claims will end in 24 hours requires providing Ukraine with more weapons and technology, which poses significant risks.
