OUR Russian economy he owes his strong resistance at the height of the war to a very small circle of his trusted economic advisers. Russian President. These are technocrats who saw the danger of war and did not take into account the huge damage from the expected Western sanctions, so they warned the Russian president a month before the invasion of Ukraine. But since they failed to convince him and prevent the invasion, they put their experience at the service of a war with which they did not agree, and remained faithful Vladimir Putin. Above all, however, they remained loyal to the Russian economy they supported, managing to limit the impact of both the war and the sanctions imposed on it by the West.

As stated in the related report Financial TimesAmong Putin’s few trusted economic advisers are prominent figures, including longtime central bank governor Elvira Nabiulina, who propped up the Russian economy during the 2014 crisis after sanctions to attach it Crimea and tamed inflation with aggressive monetary policy, while on the other hand, the CEO of the state bank Sberbank, German Gref, a close associate of the Russian president since the 1990s, also took on the difficult role of representing the rest of the meeting. on the eve of the war and present to Putin in detail its expected catastrophic consequences.

While Russia was cut off from international banking systems, its economy continued to function on the basis of already prepared alternatives.

According to a British newspaper that said its editors spoke with more than 20 former and current Russian officials, oligarchs, bankers and economists, German Gref warned the Russian president that the war could set the Russian economy back decades. This could lead to a 30% decline in GDP in dollar terms and skyrocketing inflation, forcing the central bank to raise interest rates by 35% and therefore reduce Russian incomes by at least 29%. And then the standard of living of Russians will fall below even the level of developing countries, as the country will lose access to all kinds of imports and will struggle to provide not only high-tech equipment, but also medicines and food.

Again referring to current and former Russian officials, the British newspaper reports that the Russian president did not let his trusted economist finish. She interrupted him and asked bluntly what could be done to limit the impact of the sanctions that the West would inevitably impose on the country. The technocrats did not have a quick response and did not dare to point out to Vladimir Putin the danger of provoking a geopolitical catastrophe. They left the meeting without learning anything more about the plans of the Russian president and not understanding whether they managed to influence him.

They were informed about the development of events, like the rest of the world, on television and, according to the testimony of their partners, were in a state of shock. But once the West imposed devastating sanctions on Russia, they rushed to the Kremlin’s aid, demonstrating their skills in managing the economy and containing the crisis. The Russian economy once again avoided the death that Western economists predicted when they talked about the collapse of Russian GDP by at least 30%. This year, the decline will be about 3.5-5.5%. And while Russia was cut off from international banking and payment systems, its economy continued to function on the basis of alternatives already prepared by these technocrats. Among them was an independent payment system that Elvira Nabiulina developed to protect the Russian banking system from Western sanctions in 2014. However, it was unable to use the $643 billion in foreign exchange reserves it had accumulated at the Bank of Russia, as at least half was blocked by sanctions, and Russia resorted to capital controls. However, he did not resign, as he had previously threatened to do in such a case. And, as one former Russian official told the FT, “this is how his financial staff saved Putin, and he is holding them.” He even stressed that if in their place there were well-known fanatics of the special services, as they are called by the security forces, then the fall in Russian GDP would be at least 10-15%. Of course, high energy prices also helped, leading to a 34% increase in Russia’s income.