Despite facing world’s harshest sanctions, this country’s economy is running smoothly due to…, India, China are…

New Delhi: When Russia attacked Ukraine in 2022, Western countries opposed the attack and imposed several sanctions on Moscow. But, even after several major sanctions, the country’s economy has remained stable and strong. As per government data, Moscow’s economy expanded by 4.3 percent last year, surpassing the growth rates of all G7 nations (Canada, France, Germany, Italy, Japan, the UK, and the US). Interestingly, Russia is the most sanctioned country in the world.

Notably, Britain’s economy grew by 1.1 percent, whereas the United States economy grew by 2.8 percent.

The question arises how Russia’s economy grows smoothly despite several sanctions? Well, Russia smartly diverted its oil supply, which was going to European countries, to China and India. India and China, both major importers of oil, are importing oil from Russia in large quantities, making Moscow India’s largest oil supplier. Not only that Russian currency Ruble has emerged as the world’s best-performing currency in 2025. As per Bank of America, the ruble has surged by over 40 percent.

Forward Position

As per a report by BBC, the current situation is not good for Russia as inflation is constantly increasing in the country. The current inflation rate in the country is 9.9 percent, rising by 20 percent in recent months. Companies are also trying to work with limited numbers of workers. Russia’s Finance Minister raised an alarm that the country is on a verge of recession following excessive growth. Import prices are rising due to Western sanctions but wages have also increased due to shortage of workers.

Russia faced a labour shortage of approx  2.6 million workers by the end of 2024, attributed to wartime mobilisation and emigration. Simultaneously, record-high interest rates implemented by the central bank to combat inflation have hindered business investment. Furthermore, sanctions and low energy prices have reduced Russia’s oil and gas revenues by 35 percent year-on-year in May.

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