Don't bank on Russian economic collapse to save Ukraine

Telegraph

4 days ago

Here are some of the data points. Growth last year was a rip-roaring 4.3pc, unemployment was just 2pc, the current account was in positive territory, debt to GDP was little more than 20pc and the ongoing fiscal deficit was a modest 1.8pc.
In normal circumstances, metrics such as these would be considered evidence of a model economy of the type the International Monetary Fund (IMF) would dearly like everyone to follow. Certainly, it would not be keeping officials awake at night, unlike many others.
But sadly, this is not some pin-up exemplar of switched-on Western economic management. Rather, it relates to Russia, now into its fourth year of war with Ukraine.
And it points to an economy that, though showing manifest signs of stress, is easily capable of sustaining the conflict for many years into the future.
From the start, Western thinking about Russia's capacity to support its ongoing 'special military operation' has been informed by naivety and wishful thinking.
First, it was quite widely reported that Putin was terminally ill and that his invasion was therefore one last, desperate throw of the dice. Three and a half years later, and he still appears to be in rude health.
Then it was sanctions that would bring Russia to its knees, with what was claimed to be the largest and most effective package of such measures ever attempted. They have not.
In the event, Russia has found it relatively easy to circumvent the sanctions or find alternative trading partners to fill the gaps left by one-time Western suppliers and customers.
As it is, Europe continues to buy quite considerable amounts of oil, diesel and gas from Russia, and the US has issued multiple import waivers, from fertilisers to, bizarrely, nuclear fuel rods.