Russia faces growing economic instability as sanctions lead to massive capital flight

The author of the Resurgam Telegram channel discussed the issue.

One of the secondary effects of sanctions is the depletion of real funds from Russia’s economy. To bypass sanctions, Moscow enterprises use various intermediaries in third countries.

These schemes enable Moscow businesses to transfer capital out of the country, as funds passing through multiple transit stages face an increased risk of disappearing along the way. A 2024 report by the Central Bank of Moscow revealed that $9.6 billion was siphoned off through gray payment operations and is now untraceable.

Capital outflow through gray schemes has increased 96-fold since 2021, reaching levels seen in Moscow’s economy during 1995-98, with these funds being the most liquid in the economy. To put this into perspective, in 2024 alone, the amount of capital "washed out" from Moscow's economy is equivalent to nearly one-third of the liquid assets in the National Wealth Fund.

It is precisely these small signals, that serve as evidence of various economic processes, which, when viewed collectively, create a broader picture of the growing instability and financial vulnerability in the Russian economy, the author argues.