The Long-Run Challenges to Economic Growth and Social Stability in Russia

Abstract

With the war and sanctions, Russia must tread an increasingly narrow path to avoid prolonged stagnation. The decision to invade Ukraine in February 2022 followed a decade or more of declining living standards. While war-time spending on weapons and social benefits has lifted the economy for now, such spending is unsustainable in the long run. Stagnation and resulting hardship will make maintaining social - and, ultimately, political - stability more problematic.