Russians are experiencing changes in their daily lives as imported goods become scarcer and prices rise. Many global brands have been replaced by Russian alternatives, and Chinese cars are becoming more prevalent on the streets. Despite economic challenges stemming from sanctions imposed by Europe, the U.S., and their allies, President Vladimir Putin's Russia maintains a sense of stability.
Inflation is above the central bank's target at over 7%, but unemployment remains low, and the economy is projected to grow by 2.6% this year. The government's substantial spending on military equipment and support for the construction sector through subsidized mortgages are contributing to economic growth.
Since 2014, when Russia annexed Crimea and faced food import bans, the country has increased self-sufficiency in food production. Parallel imports through third countries allow access to Western products at higher prices. While some foreign companies have left or sold their businesses, China has emerged as Russia's primary trade partner.
The Russian economy heavily relies on oil and gas exports, with revenue from oil exports reaching $15.6 billion in January. The government has implemented measures to combat inflation, such as raising interest rates and restricting gasoline exports.
Looking ahead, the economy's long-term prospects are uncertain due to limited foreign investment and potential challenges in managing inflation. The stability of the economy hinges on oil prices, which currently trade around $70 a barrel for Russia's Urals blend.
Despite ongoing economic shifts and geopolitical tensions, Russia's economy demonstrates resilience and stability, with state finances proving more robust than anticipated.
