Despite initial resilience to Western sanctions and its isolation from global financial markets, Russia’s economy faces mounting pressures that may force Vladimir Putin to choose between military spending and domestic consumption.
While Russia initially weathered sanctions through energy exports to China and India and protected its middle class by supporting the ruble, these buffers are eroding rapidly, according to Alex Isakov, a Bloomberg economist. The National Wealth Fund (NWF), crucial to Russia’s economic stability, has plummeted from $140 billion to just $55 billion, with liquid assets excluding gold at a mere $31 billion—matching 2008 levels.
This depletion has immediate consequences. The ruble has fallen to its weakest level since early 2022, and the central bank’s benchmark rate stands at 21%, constraining both consumer spending and business investment. Bloomberg projects that Russian growth will slow…
