Russia's economy shows mixed resilience four years after war, study says

A new report cited by The Economist challenges the view that Russia's war‑time economy is on the brink of collapse. While official data show a 0.2 % drop in GDP in the first quarter year‑on‑year, real per‑capita GDP has risen about 12 % between 2022 and 2025. Unemployment remains around a historic low of 2 % and inflation has halved from its post‑war peak. The Institute for World Economics warns of “structural exhaustion” and some analysts, such as Charles Hecker of the Royal United Services Institute, argue that “Russia is probably already in recession”. Nevertheless, the economy has benefitted from redirected trade to China and India, higher oil prices, and strong state spending on the military (now 3‑4 percentage points of GDP). Real wages are up 25 % since 2019, airline passenger kilometres rose 10 %, and luxury car imports, including Lamborghinis, jumped 80 %. Critics note that heavy defence outlays strain public finances, but the overall picture suggests resilience rather than imminent collapse.