On the first day of the invasion, Russia’s RTS stock index fell by as much as 39 percent. The ruble dropped to record lows as Russians rushed to swap currency, and the Moscow and St. Petersburg exchanges shut until at least 18 March, the longest closure in Russian history.
On 26 February S&P Global Ratings cut Russia’s government credit rating to “junk”. Two days later the central bank raised interest rates to 20 percent and barred foreigners from selling local securities. By 28 February the price of credit default swaps pointed to about a 56 percent chance of default.
Western companies and investors pull out
BP said on 27 February it would sell its stake in Rosneft, about half its oil and gas reserves and a third of its production. The sale was projected to cost up to $25 billion. Norway’s government pension fund, the world’s largest sovereign wealth fund, announced it would divest Russian holdings worth about 25 billion Norwegian krone, or $2.83 billion. Shell followed on 28 February, and on 1 March Eni said it would cancel its investments in the Blue Stream pipeline. Maersk and Mediterranean Shipping Company stopped container shipments to Russia, except for food, medical and humanitarian supplies.
Sanctions also froze assets of the Russian Central Bank, which holds $630 billion in foreign-exchange reserves. European Council President Charles Michel said in May it was important “not only to freeze assets but also to make possible to confiscate it, to make it available for the rebuilding of Ukraine”.
Energy payments and food supplies were largely left out of the sanctions, because of the risk to world food prices. Russia and Ukraine are both major wheat producers, and their grain moves through the Bosporus to the Mediterranean and North Africa. Central Asia, which depends on Russian trade and migrant work there, was hit particularly hard.
Russia holds up, with strain
The shock to Russia did not turn into collapse. By August 2022 it was selling almost as much oil as before the invasion, with buyers in the Middle East and Asia making up for falling sales to Europe. Because of higher prices, Moscow’s monthly revenue reached $20 billion, against $14.6 billion a year earlier. In late July the IMF upgraded its estimate of Russian GDP by 2.5 percent.
The budget told a different story. Russia ran a record deficit of 1.45 trillion rubles by August, as monthly tax income from fossil fuel exports fell from 70 billion rubles to 33.7 billion. In September the finance ministry told all public sectors to cut spending by 10 percent. Russian Railways defaulted on $268 million of bonds in April after missing a payment on a Swiss franc bond. In November 2022 Russia was reported to have entered recession after a second straight quarter of GDP loss.
Most estimates put the cost of each day of the war to Russia at $500 million to $1 billion. In July 2023, more than 43 percent of industrial enterprises reported a shortage of factory workers, up from 35 percent in April. More than 300,000 mostly younger Russians had emigrated, among them more than 50,000 IT specialists.
Economist Sergey Guriev described an economy split in two. The military sector, running on government orders and soldiers’ pay, has grown, while civilian industry suffers from high inflation, underemployment and expensive credit. Civilian production fell by 10 percent, he said, but defence orders kept that out of the GDP figures.
A Stockholm Institute of Transition Economics report in April 2025, presented to EU finance ministers on 13 May 2025, called official Russian statistics unreliable and opaque. It said fiscal stimulus had kept the economy afloat but on an unsustainable path. “Even under optimistic growth scenarios, Russia’s economic scale remains insufficient to match its Western adversaries’ capacity in a sustained geopolitical rivalry,” the report concluded.
