The Economic Advisory Board of the Latvian Constitutional Defense Bureau (SAB) has released a comprehensive report titled "The Damage to Russia Caused by Western Sanctions." The document provides a rare look into how Moscow internally assesses the impact of global sanctions on its economic stability. This was reported by Dengi.ua , referencing Latvian public media.
SAB Director Egils Zvidris informed reporters that the data for this analysis was derived from intelligence gathered through operational activities. According to these estimates, Russia has incurred approximately $130 billion in additional costs (roughly $32.5 billion annually) since the full-scale invasion of Ukraine began. These funds have been primarily diverted to bypass sanctions and purchase goods that were available at significantly lower prices from Western markets prior to the war. Notably, this calculation excludes the broader losses associated with the inability to secure essential imports.
The SAB also highlighted that sanctions have effectively severed several Russian industries from vital Western markets, with no viable replacements found over the last four years. Thus, if we compare the figures for 2021 and 2025, Russia's exports of iron ore decreased by 40%, ferrous metals by 20%, chemical products by 35%, and wood and pulp by 50%.
According to the report, internal forecasts from Russian think tanks suggest these sectors will be unable to regain their lost market share within the next five years, despite optimistic public rhetoric from Kremlin officials. Intelligence suggests that Moscow is not only tracking existing damage but is increasingly concerned about long-term systemic risks.
Specifically, Russian institutions estimate that by 2030, the country’s foreign trade may contract by $175.5 billion—approximately $35 billion annually, or 5% of the current total turnover. The majority of this risk - approximately $136 billion - is tied directly to Western restrictions, including secondary sanctions against trading partners, trade embargoes, and U.S.-imposed duties.
The document emphasizes that these figures represent only the direct costs of adapting to sanctions and do not reflect the full impact on the macro-economy. Specifically, they do not account for the reduction in tax revenues or the inflationary pressure on domestic commodity prices.
Furthermore, Russia is calculating potential catastrophic losses in the energy sector. Increased sanctions pressure in this domain could cost the Russian economy $216.5 billion over five years, or approximately $43.3 billion annually. This scenario assumes a full EU embargo and a reduction in oil and gas imports by China, India, and Turkey. The SAB notes that these figures exceed the projected losses for general foreign trade, indicating a high degree of volatility in these internal estimates.
Finally, the SAB suggests that Vladimir Putin may be receiving sanitized or distorted information regarding the economy, with advisors emphasizing positive trends while glossing over systemic risks. This information bubble likely reinforces the leadership's belief that sanctions-related losses are manageable in the pursuit of geopolitical goals in Ukraine. Consequently, despite mounting economic strain, the Russian leadership is unlikely to alter its current foreign policy trajectory.