A game of cat and mouse

Under pressure, the Russian economy has proved resilient - but as revenues fall, Vladimir Putin has little room left for miscalculation

- Patrick Wintour

The Russian economy is on track to be cut in half," Joe Biden said in March last year, as he heralded sanctions imposed after the invasion of Ukraine. In Europe, too, the talk was tough: Annalena Baerbock, the German foreign minister, said the sanctions were "hitting the Putin system... at its core of power". The European Commission president, Ursula von der Leyen, said the aim was to "cripple Putin's ability to finance his war machine".

The reality was somewhat different, reflecting what analysts say was a hubristic over-confidence about the speed sanctions agreed with unprecedented coordination by the G7 could damage Russia.

The Russian economy contracted by only 2.2% last year. Unemployment, according to admittedly dubious official figures, stands at 3.7%. The car and electronics industries have suffered but construction has grown. A bumper harvest boosted agriculture.

Russia is now forecast to grow faster in 2023 and 2024 than the UK. As the war hits its one-year anniversary on 24 February, the debate about whether sanctions are effective has intensified.

Defenders say the rouble and headline GDP are dreadful indicators, partly because Russian statistics are manipulated as part of the war effort. "Please do not ask me about GDP figures. They do not matter," said Elina Ribakova, the deputy chief economist at the Institute of International Finance.

Vladimir Milov, a former Russian energy minister, ally of Alexei Navalny, and author of a Martens Centre report on sanctions, said it might be more instructive to track a dozen or so "soft indicators" such as alcohol sales, divorce rates, shoplifting, spending on food, bank customer sentiment or tax revenues.