I never mentioned anything about how the size of their economy is changing, as it's irrelevant to the discussion on isolation.
But since we're talking about their economy, it's not good. GDP is up, but it's being inflated by war production. Government spending in war related industry is now at about 40%. It's funding this with oil and gas revenues, which it's now even more reliant on.
The sanctions were supposed to stop this, but Russia is mainly selling to BRICS nations who have not implemented the sanctions. They're having to use convoluted trade routes which means they are not getting as much for them as they could, but the high prices mean it's still very good for them in the short term.
Imports are a much bigger problem. The high tech machinery they need has to come via places like Turkey, instead of direct from Germany, so it's costing more to keep the real economy going. Also, the Ruble has lost a load of value, so it's a double whammy of higher costs and lower purchasing power.
Very little of the wartime economy helps the average Russian citizen. In fact, living standards are falling, while they have massive inflation, even despite wage increases.
As ever more labour is employed creating bombs, tanks, etc., along with the loss of manpower from conscription, and the exodus of those avoiding the draft, there's a severe shortage of workers.
Civilian industries are having to pay more to attract workers, pushing up prices further. The non-military parts of the economy have not grown at all, and productivity is flat, or declining.
The real worry is what happened when the war is over? Being so dependent on war for growth either means looking for new wars, or a huge correction as they try to rebalance to peacetime industries.
There's also the sovereign wealth fund. Previously, if Russia made a certain amount of money from oil and gas, it was invested and worked as a rainy day fund, to prop up pensions in times when fossil fuel revenues were low.
Since the war, they've changed the rules a few times to reduce the level of profit required before the wealth fund gets a share. Due to sanctions, they ordered the wealth fund to buy shares in Russian companies to shore up the stock market. Last year they changed the rules again, stopping further investment altogether, and allowing the oil and gas profits to directly fund the war instead.
They have also backdated the rule to claw back surplus from previous year's investments, and so during the most profitable time to be an energy supplier, their wealth fund is shrinking, and future generations are paying for Putin's war from their pension pot.
They have reimplemented capital controls to stop the Ruble collapsing, and are considering whether to make the controls indefinite (they expire at the end of the month). The bank and the Kremlin disagree on this, and the central bank thinks high interest rates are the answer. They set them at 16% in December, up from 7.5% earlier in 2023.
The sanctions are unlikely to end any time soon. The labour shortages will only get worse with more conscription, and more war. A recession is likely coming, if it's not already started, and America is putting pressure on China over its sanctions evading, which China does seems to care about - at least publicly.
So, yep, GDP is up, but at what cost?