The well-being of Russian households has reached its highest level in a decade, a survey carried out by the Bank of Finland institute for Emerging Economies (BOFIT) found.

According to the study, despite three years of war and sweeping Western sanctions there has been a marked increase in life satisfaction and financial resilience. The research, conducted by economists Sinikka Parviainen of BOFIT and William Pyle of Middlebury College, finds that general contentment among Russians has risen noticeably since the onset of the conflict in 2022, thanks to a military Keynesianism boost to the economy.

Russian President Vladimir Putin said on February 21 that Western sanctions have played a “stimulating role” in Russia's economy, forcing companies to invest and innovate. It has also led to a surge in real incomes as nominal wages have continuously risen faster than high inflation thanks to a chronic labour shortage, leading to the creation of a war middle class. Another study by BOFIT found that Russia’s poorest regions have been the biggest winners from the war, as many of voluntary recruits to the Armed Forces of Russia (AFR) come from underprivileged areas.

A debate continues on the overall health of the overheating Russian economy, which is suffering from persistent high inflation and punishing interest rates. Some argue that there will be a wave of bankruptcies this year, while others say the Russian economy is more robust than it first appears and the chance of a crisis remains low.

BOFIT’s study is the latest evidence that Putin has successfully managed to shield the bulk of the population from any negative influences of the war. As a result, his popularity remains at around 80%, according to the latest polls, and patriotism is at an all-time high.

The study draws on data from the Russian Longitudinal Monitoring Survey (RLMS), a long-standing household panel survey administered by the Higher School of Economics, The Bell reports. Covering the years 2013 to 2023, the survey encompasses 6,000-8,000 households and up to 21,000 individuals. It includes responses to questions such as “how satisfied with life are you right now?” and “how satisfied with your financial circumstances are you right now?”, alongside indicators such as large purchases, cultural spending, and household financial buffers.

The economists found that satisfaction with life and financial circumstances surged during the first two years of Russia’s full-scale invasion of Ukraine. Notably, financial satisfaction returned to 2014 levels for the first time – widely regarded as a pre-crisis benchmark before the annexation of Crimea, the imposition of sanctions and a global oil price collapse triggered economic turmoil.

Extreme sanctions were designed to crush the Russian economy and make it impossible for the Kremlin to fund its war in Ukraine. They had the opposite effect. Russia’s economy has been amongst the fastest growing of any major economy in the last two years, expanding by 4.1% in each of 2023 and 2024, while the rest of Europe slides into recession as a result of the boomerang effect of sanctions.

While large purchases declined sharply in 2022, the subsequent recovery has been robust. The automotive sector was amongst the worst affected by sanctions coming to a screeching halt in 2022, but since then has almost fully recovered as Chinese and Iranian firms stepped into the market slots left vacant by the departing European Original Equipment Manufacturers (OEMs).

“Demand for non-food goods has increased faster than inflation and wages,” the researchers noted, The Bell reports. Cultural expenditure also rebounded in 2023, reaching levels last seen in 2018. Furthermore, the share of households able to maintain their standard of living for several months without income reached a 10-year high.

Official Russian statistics show real incomes have continued to improve since the war began. According to the study, real incomes in 2023 not only recovered to 2013 levels but exceeded them by 5%, marking the end of a decade of stagnation in living standards.

The surge in state spending related to the war and defence industries is driving the growth as Putinomics, years of hoarding cash and paying down debt, has been reversed after the economy was put on a war footing.

“The high salaries offered by the state to people sent to work at the front, as well as those paid to soldiers (from RUB200,000 a month), have played a big part,” the researchers said.

If US President Donald Trump successfully ends the conflict this year, many Russians will look back to the three years of the Ukrainian as amongst the best years they have experienced since the fall of the Soviet Union.