After Putin’s invasion of Ukraine back in February 2022, the West responded with some of the most wide-reaching sanctions ever. The UK government claimed that they ‘would cripple Russia's war machine' whilst Biden asserted that 'sanctions are devastating their economy'. But a year on, the predicted 15% collapse in GDP has not materialised and Putin’s capacity to wage war seems not to have been affected. Maria Demertzis, Senior fellow at Bruegel and part-time Professor of Economic Policy at the European University Institute in Florence, explains why.

When Russia first invaded Ukraine almost a year ago, many countries condemned the aggression and applied sanctions in an attempt to squash its economy and isolate it from global engagement. The expectation during the early days of the war was that the economy was going to contract by as much as 15%. Since then, those numbers have been heavily revised upwards and the latest forecasts by the IMF show a contraction as little as just over 2%, with moderate growth expected in 2023. In reality, many agree that the situation is not quite as rosy, particularly since data emerging from Russia is no longer reliable.