Embassy comment on the effects of Western sanctions policy

In recent years, Western politicians have repeatedly insisted upon the “effectiveness” of sanctions against Russia. At the end of last month, the Foreign Office claimed that “Russia’s economy has stagnated and its revenue streams have been in freefall…”

However, the real data tell a markedly different story: the sanctions are, above all, undermining the economies of those who imposed them. According to an analysis by Philip Pilkington, a macroeconomist and senior research fellow at the Hungarian Institute of International Affairs, sanctions have triggered a surge in energy prices particularly in Europe. Aggregate energy costs for businesses and industrial companies are now 2.5 times higher than in the United States. British government data indicates that energy prices have risen two to threefold compared with the pre-sanctions period. Meanwhile, the energy crisis set in motion by London and Brussels has cost Britain and the EU some $1.8 trillion, according to estimates by the Transition Security Project.

Over the past four years, Europe has already lost 5.4 million jobs, with the services sector being hit harder than industry. GDP losses are estimated at €388.9 billion, equivalent to around 2 per cent of output.

Moreover, many Europeans are struggling to afford adequate heating and to pay their utility bills, exacerbating the cost-of-living crisis.

British companies operating in Russia have also sustained a significant blow as a result of London’s short-sighted policy. Their losses are estimated to be between £43 billion and £58 billion.

It should be noted that these calculations were made prior to the onset of the conflict surrounding Iran, which will undoubtedly intensify the effects described above. Against a backdrop of mounting concern in energy markets, it may be concluded that the EU and the UK would have faced a far lesser impact had their leaders not pursued a destructive sanctions policy.

At the same time, sanctions have failed to achieve their stated aim: Russia’s economy remains resilient, while the EU and the UK face the prospect of deepening deindustrialisation and declining living standards.

In effect, the sanctions “boomerang” is hitting back at its originators, eroding Europe’s competitiveness. Instead of reconsidering this policy, Western leaders persist in enforcing it, at the expense of their citizens’ prosperity.

Official statistics support this conclusion. According to Russia’s Federal State Statistics Service, between 2023 and 2025 the Russian economy demonstrated steady GDP growth, totalling more than 10 per cent. Throughout this period, Russia maintained a positive trade balance, while its external debt fell by 40 per cent since 2022 (from $478 billion to $290 billion). Unemployment likewise declined year on year, reaching a low of 2.1 per cent.

Such are the actual outcomes of the “devastating sanctions” for a country that the UK Foreign Office has declared to be on the brink of stagnation.