This analysis is a follow-up to the comprehensive report “From Bad to Worse: The Continuing Effects of Sanctions on Russia”, which was published by the Wilfried Martens Centre for European Studies in June 2023. We continue to analyse the nuanced effects of Western sanctions against Russia two years since the beginning of Putin’s full-scale invasion of Ukraine, and, in contrast to the widespread international optimistic assessment of “Russia’s economic resilience” to sanctions, paint a very different picture: behind the facade of a handful of positive macroeconomic indicators like strong GDP growth and low unemployment, Russia’s actual economic reality is much bleaker, and the situation is getting worse. 

This paper intends to provide Western policymakers with realistic in-depth analysis of multiple effects of sanctions on the Russian economy, helping to identify areas where sanctions are truly working, and Putin’s main economic vulnerabilities, an un-derstanding of which is crucial to further strengthening the Western response to Putin’s war of aggression against Ukraine, and limiting Russia’s ability to finance the war.