Where Does It Hurt?

It’s difficult to get a read on the impact of sanctions on Russia’s economy

- Matthew Boesler

In a televised address on March 16, Russian President Vladimir Putin said Western powers have subjected his country to an “economic blitzkrieg” of sanctions. But for Russia watchers attempting to get a read on the scale of the damage, there’s not much to go on yet.

At the start of the pandemic, many analysts turned to unconventional indicators such as mobility and traffic-congestion figures provided by the likes of Google and TomTom NV—the Dutch GPS maker—to gauge the economic impact of Covid-19 in real time. But for Russia they need a new playbook, because these so-called high-frequency datasets aren’t proving as useful.

“It’s not so much about movement restrictions,” says Natalia Gurushina, chief economist for emerging-markets fixed-income strategy at Van Eck Associates Corp. in New York. Rather, “it’s about adjusting spending patterns” as the value of the Russian ruble collapses (it’s down almost 30% against the U.S. dollar since January); foreign-owned chains including Ikea, McDonald’s, and Starbucks close their doors; and the flow of imported goods dries up.