The Economic Fallout of Putin's Ukraine War: Russians Flee and Sanctions Take Effect

A U.S. Treasury Department analysis reveals that Russia's economy would be 5 percent larger if President Putin hadn't launched the invasion of Ukraine, with Moscow now spending over $100 billion on defense, nearly a third of its total expenditures in 2023. The war, along with international sanctions and Moscow's policy response, is straining Russia's economy, leading to growing expenditures, a depreciating ruble, increasing inflation, and a tight labor market. Emigration from Russia has surged, with a record number of people leaving the country, resulting in a loss of human capital that further weakens Russia's growth potential.