Elina Ribakova, deputy chief economist at the Institute of International Finance, told Grid that Nabiullina’s “very skillful response” is one reason why the economic impact of sanctions has not been as profound as anticipated. Ribakova also noted that Russia had taken steps to sanction-proof its economy since it was first hit by major international penalties after the annexation of Crimea in 2014. “They sort of insulated themselves. They are less integrated into global capital flows than they were before 2014,” Ribakova said. “They implemented inflation targeting. They cleaned up the financial system to the extent they could.”
Ribakova predicts that “within this year, we will see the effect on Russian economy as companies start to run out of parts or equipment and have to start laying people off or putting them on unpaid leave.”
Will it matter?
Fishman, who helped craft the sanctions placed on Russia after 2014, said, “Those sanctions were a two out of 10, in terms of intensity. Within the first week of the  war, the U.S. escalated to about eight out of 10. The speed of escalation was much faster than anyone was expecting.” That escalation was what sowed panic in the Russian financial markets in the early days of the war. “But then as the war went on, we didn’t get from eight out of 10 to 10 out of 10 as fast as many anticipated,” he added. This allowed the relative stabilization seen since. With serious talks over an oil embargo and other measures looming, Fishman said, “I think sanctions are now kind of back on the upswing and there’s nothing really that can prevent Russia’s economy from cratering.”
For all these reasons, Russia will likely soon face far more economic pain as a result of the global response to Putin’s invasion of Ukraine. But when it comes to pain that might influence Kremlin behavior, Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, isn’t optimistic. “This is a country that’s already been willing to forgo a fair amount of growth [in pursuit of foreign policy goals.]” she told Grid. “And so we haven’t necessarily seen this sort of policy change the U.S. and its allies are going for.”
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