“The Time When Russia’s Economy Was a War Economy on Steroids Is Over” (One Decision)

“The Time When Russia’s Economy Was

a War Economy on Steroids Is Over”

🎙️In This Week's Episode:

A fascinating conversation with Alexandra Prokopenko — once part of the Kremlin press pool, later an advisor to the Bank of Russia, and now a fellow at the Carnegie Russia Eurasia Center.

She unpacks why Russia’s economy has shifted from “war on steroids” to permanent militarization, how sanctions hardened solidarity instead of weakening it, and why Chinese trade is fast becoming the backbone of Russian industry.

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🎙️Episode Highlights

Russia’s Economy: “Not Great, Not Terrible.”

Alexandra Prokopenko notes that despite inflation easing to 8% from last year’s 10%, Russia faces high key rates and slowing growth. With military spending at 7.7% of GDP—or 40% of federal outlays—she expects civil budget items to be further deprioritized. The "huge problem," she warns, is not about the money, but about the workforce. 

The Foundations of Russia’s Wartime Economy

Prokopenko outlines three pillars of Russia’s recent economic resilience: budget injections worth over 10% of GDP, a still-functioning market economy with subsidies and niches filled by domestic firms, and a massive lifeline from China (with India as a secondary buyer) replacing Europe as the main export market.

From Frozen Assets to a Forced Unity

Prokopenko describes Western sanctions as triggering a “forced rally-around-the-flag effect." By freezing assets of Russia’s elites and professionals, sanctions pushed them to repatriate money and close ranks in Moscow. While not turning into Putin’s fan base, many now see their future tied to Russia and “wish… not to lose this war.”

Why Going Home Isn’t an Option

As a former journalist, Prokopenko describes Putin as a “prepared speaker” who can “mirror people and become a comfort” in one-on-one interactions. Yet like many in the Russian diaspora, she knows she cannot return home while Putin remains in power — or under the repressive laws that label her a “foreign agent” and criminalize her work.

More About Our Guest

Alexandra Prokopenko is a fellow at the Carnegie Russia Eurasia Center and a former advisor to the Bank of Russia, where she served from 2019 until her resignation shortly after Russia’s invasion of Ukraine.

Before her work in policy, she built a career in journalism, earning recognition for her reporting until being banned from the Kremlin press pool in 2017.

The conversation is out now, only on One Decision. 

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