INTERESTINGLY, the Russian economy has become the most sanctioned entity in the world, yet it remains “stable” and “sustainable,” with its “resilience” and “self-reliance” vividly reflecting its “diversity” and developed economic mechanisms.
It appears to have established its own “unique” and “workable” economic model capable of successfully mitigating Western sanctions. Russian Foreign Ministry Spokesperson Maria Zakharova has also emphasized that, through successful economic maneuvering, developing new economic mechanisms and strengthening cooperation with non-Western partners—alongside a dynamic economic diplomacy—Russia continues to achieve remarkable results. Hence, its pragmatic foreign policy and economic diplomacy now focus on building “reliable conditions” for collaboration with countries of the global majority.
Pak-Russia bilateral relations are also gaining “momentum” and creating new and diverse opportunities for greater socio-economic cooperation, investments, joint ventures, industrial coordination, digitalization, modernization and trans-regional connectivity. Obviously, Russia has developed an effective “antidote” against the rapidly changing Western power politics. Thus large-scale sanctions aimed at isolating Russia financially and technologically have not achieved their goals. Additionally, the Russian government’s prioritization of developing some “alternative” financial systems, trade in national currencies and closer coordination with BRICS members and other partners are paying their dividends.
Evidently, Russian Foreign Minister Sergey Lavrov emphasized the strategic importance of the BRICS while meeting with the foreign ministers’ member countries on September 26, 2025, on the sidelines of the UN General Assembly session. Sergey rightly emphasized the implementation of the initiatives launched during the Russian and Brazilian presidencies consisting of creating a new investment platform, establishing a “cross-border payment system” for BRICS countries, developing a “depository and clearing infrastructure”, implementing a “reinsurance mechanism” and launching a “BRICS grain exchange”. The Russian foreign ministry also rejected Western claims of economic decline, insisting that the EU faces its own sanctions-related challenges. Russia described BRICS as a “non-confrontational platform” promoting equality and mutual benefit, adding that no member country has further strengthened its soft power image, scope, utility and brightened chances of further expansion despite Western criticism. Interestingly, most recently the Chinese President Xi Jinping has vowed to deepen relations with Russia despite a “turbulent” external environment. While meeting with Russian Prime Minister Mikhail Mishustin in Beijing Xi made the pledge to expand investment and economic relations which has created shock and awe effects in many capitals around the globe.
Moreover, China-Russia relations have “forged” ahead this year despite Western reservations, with China extending its “strategic” cooperation in sectors including energy, agriculture, aerospace, the digital economy and green development. Xi Jinping and President Vladimir Putin signed a “no-limits” partnership, and Putin recently instructed his government to develop “multimodal transport and logistics centres” on the Chinese and North Korean borders to facilitate economic and industrial ties. A recent report by “the French Institute of International Relations (Ifri)” (October 31, 2025) highlighted the “resilience” and “diversity” of the Russian economy, which maintained its stability and sustainability despite unprecedented sanctions.
During 2022-2024, GDP growth reached 4.3 percent in 2024, while the decline in trade with Europe was offset by fast-expanding trade with China, India and North Korea. High commodity prices, successful sanction circumvention and disciplined fiscal spending supported this stability. The IMF’s 2024 report confirmed 3.6 percent growth, up from 3.2 percent, placing Russia comfortably ahead of the United States (2.8 percent), Germany (0.0 percent), France (1.1 percent) and the United Kingdom (1.1 percent). Thus, Russia’s economy has defied widespread expectations that US and EU-led sanctions would expose its vulnerabilities, emerging as one of the fastest-growing major economies outside India and China.
By June, 2024, the World Bank had confirmed that, as per its most recent data release from the International Comparison Program (ICP), Russia had overtaken Germany and Japan to become the fourth-largest economy in the world (using the purchasing power parity [PPP] method of GDP calculation). Soon after, the World Bank also upgraded Russia from “upper-middle-income country” to “high-income country” status, with gross national income (GNI) per capita having reached $14,250 in 2023. Critical analysis of the Russian macro-economy reveals that steady oil export, strength in corporate investment, including by state owned enterprises and a lot of robustness in private consumption has maintained its economic growth. Moreover, government spending also played an important role in the stability of Russian economy.
In summary, the Russian government adopted a holistic and comprehensive economic, fiscal, monetary and industrial policy and its acceleration of spending has played a pivotal role in buoying the economy. Growth in domestic demand is significantly outstripping the capabilities to expand the supply of goods and services. The Russian Federal State Statistics Service (Rosstat) found that the real disposable incomes of Russians during the second quarter of 2024 surged by 9.6 percent, which was reportedly the highest annual growth for a quarter in more than 10 years.
Despite the Western false and fake propaganda Russia is also experiencing a healthy consumer boom and people are getting higher salaries. Domestic demand is supported by growth in lending and incomes of households and businesses, as well as by increased fiscal spending. The upward deviation of the Russian economy from a balanced growth path is still significant. The Ministry also hiked its GDP-growth outlook for 2025-2027: 2.5 percent for 2025 from the earlier 2.3 percent forecasted in April, 2.6 percent for 2026 from 2.3 percent and 2.8 percent for 2027, compared with its April projection of 2.4 percent. Hence Russia is still economically a formidable economic giant, politically stable, socially united, industrially vibrant and its foreign and economic policies under its president Putin are successfully battling down all sanctions.
—The writer is President, the Centre for Knowledge and Public Policy, Regional Expert: China, CPEC, BRI & World Affairs.
