Alexander Firanchuk, Senior Researcher at the Gaidar Institute’s International Trade Department, commented for Forbes on the results of a study comparing the actual performance of the Russian economy with a counterfactual scenario—that is, how the economy might have developed without the sanctions shock and large-scale fiscal stimulus.
The expert noted that comparing actual GDP with a counterfactual scenario allows for an assessment of the combined effect of various factors but does not isolate the impact of sanctions alone. The economy was simultaneously influenced by sanctions, increased government spending, growth in military production, and conditions in commodity markets.
According to Alexander Firanchuk, the fact that actual GDP exceeded the projected trajectory without sanctions does not mean that their negative impact has ended. Fiscal stimulus played a significant role, temporarily offsetting some of the effects of the sanctions.
“It is more accurate to speak not of the sanctions’ effect having run its course, but of its temporary offset by a powerful fiscal stimulus. Sanctions do not have the same natural time limit as fiscal stimulus. Furthermore, some of their effects manifest with a lag—through access to technology and equipment, the cost of imports and logistics, the level of competition, and productivity. Therefore, the positive deviation of actual GDP from the counterfactual trajectory does not indicate either the absence of sanctions-related costs or an improvement in the economy’s long-term prospects,” explained Alexander Firanchuk.