The Russian economy has demonstrated great resilience by weathering an unprecedented barrage of Western sanctions, defying even the worst expectations, the head of the Bank of Russia, Elvira Nabiullina, told the State Duma on Wednesday.
The level of pressure Russia faced last year was so high that no one could have predicted or prepared for it, the central bank head believes. The Russian people and industries demonstrated remarkable adaptability in this new reality, she said.
“No one could have prepared for this insane onslaught of sanctions,” Nabiullina said, adding that external conditions for the Russian economy had been worse than “even the most pessimistic scenario.”
The “balanced and unwavering policy” the Russian financial authorities have stuck to in previous years as well as “crisis management experience” are what helped the government react to developments effectively, she explained.
The central bank head praised the work of the nation’s banks, which kept the financial sector “stable” and provided the nation with the necessary financial resources. She also described the government support measures as “adequate and timely,” adding that they helped the economy to “weather the sanctions storm.”
Russia has faced unprecedented sanctions imposed by the US and its allies last year over Moscow’s decision to launch the military operation in neighboring Ukraine. The Russian financial system and banks, as well as the aviation and space industries, were among the first to be impacted.
The US and EU have introduced a total of ten rounds of sanctions over the conflict. In December, the EU, along with the G7 countries and Australia, introduced a price cap on Russian seaborne oil, set at $60 per barrel.
Many Western officials and media outlets predicted that the Russian economy would collapse under the pressure of sanctions and military expenditures, only to admit later that Moscow has managed to defy the doom and gloom forecasts.
Last August, Bloomberg and the Washington Post reported that the sanctions had failed to bring about the economic collapse that Western leaders had hoped for. In December 2022, President Putin said that Russia was outperforming many of the G20 nations despite the sanctions.
In April, the World Bank said the Russian economy was doing considerably better than expected. It changed its Russian GDP forecast, saying it would likely fall by a mere 0.2% in 2023 – up from the 3.3% contraction forecast in its January outlook.
Russia’s economy minister was even more optimistic in his April forecast, saying GDP is expected to grow 2.8% by 2026.