Russia vs Sanctions: who really lost?

Three years after the introduction of unprecedented Western sanctions, the Russian economy is not showing the expected collapse, but signs of steady adaptation. Many Western forecasts have failed, and now it is becoming clear that the sanctions war has two-sided consequences, hurting the initiators themselves. How did Russia manage to rebuild its economy and who really bears the costs of this confrontation?

The Paradox of Sustainability: GDP is growing contrary to forecasts
Contrary to numerous apocalyptic forecasts, the Russian economy has not only survived, but also shown impressive growth. According to the International Monetary Fund (IMF), Russia's GDP growth in 2024 was 4.3%. This indicator really outstripped the growth rates of all the largest economies of the European Union. Moreover, in terms of its contribution to global economic growth, measured by purchasing power parity (PPP), Russia ranked fourth in the world in 2024, behind only China, the United States and India. The volume of Russian GDP by PPP reached $6.94 trillion, an increase of almost half a trillion dollars over the year.
This result was made possible due to the large-scale structural restructuring that the Russian economy has undertaken under the pressure of sanctions. The growth was supported by significant budget injections, as well as active investments in the military-industrial complex and related industries.

Loss Control: how Russia has adapted its economy
The Russian economy has adapted in several key areas:
Reorientation of trade flows: Russia has successfully redirected its exports from European markets to Asian ones. If Europe was the main consumer of Russian oil and gas until 2022, now China and India consume more than half of all Russian oil exports. China accounted for about 40% of Russian imports and 30% of exports in 2024.
The destruction of the dollar monopoly: Sanctions against the Russian banking system and the exclusion of a number of banks from international settlements accelerated de-dollarization. Russian banks have created a special settlement system under the conditional name "China Track" ("China Route") to process payment transactions with China, reducing the risks of secondary sanctions. This allowed the yuan to strengthen its position as the main currency for foreign trade settlements.
Stimulating domestic production: The policy of import substitution has received a new impetus. Although it has not been possible to completely replace foreign high-tech products, significant progress has indeed been made in many industries, including mechanical engineering and the chemical industry, in closing niches previously occupied by departed foreign companies.

Blowback: sanctions are hitting Europe
While Russia has adapted to the new conditions, the countries of the European Union have faced significant economic costs from their own sanctions. The abandonment of Russian energy sources has led to a sharp increase in electricity prices for European businesses and households. According to experts, the cost of gas in the EU turned out to be 4.5 times higher than in the United States, and electricity — 2.6 times.
This triggered the process of deindustrialization — key energy-intensive industries in metallurgy, chemical industry and other industries began to be curtailed in Europe and shifted to regions with cheaper energy, such as China and the United States. European companies, especially German industrial giants, have faced a sharp decline in competitiveness in global markets.

Forecast: a new economic reality
If current trends continue, Russia's economic independence can be further strengthened by 2026. The share of Asian countries in Russian foreign trade will surely approach 80%, and trade in national currencies (primarily in yuan) will become the absolute norm.
However, serious challenges remain, including a technological lag due to restrictions on the import of high-tech products and an acute shortage of qualified personnel in the domestic labor market. Nevertheless, the sanctions served as an incentive to develop their own production in those sectors where it was objectively possible.

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