The authors claim their work casts doubt on Moscow's claims that the economy remains robust and that the West is suffering more through "a war of economic attrition."
What does the study say?
Yale's team of experts used consumer data and figures from Russia's international trade and shipping partners to measure economic activity five months after Moscow launched its invasion of Ukraine.
They found that Russia's position as a commodities exporter had been irreversibly eroded, having been forced to switch from its main markets in Europe toward Asia.
The study said Russian imports have largely collapsed since the war began, and that the country is facing stark challenges securing crucial inputs, parts, and technology.
"Russian domestic production has come to a complete standstill with no capacity to replace lost businesses, products and talent," the team found.
"The hollowing out of Russia's domestic innovation and production base has led to soaring prices and consumer angst," the authors added.
With the exodus of some 1,000 global companies, Russia has lost companies that represent some 40% of gross domestic product, according to the study.
How Putin's war is affecting the world economy
The effects of Russia's war of aggression against Ukraine are being felt around the globe. Food and fuel prices are rising everywhere, and some countries have already seen rioting.
Image: Dong Jianghui/dpa/XinHua/picture alliance
Shopping is increasingly expensive
German consumers are feeling the pinch of the rising cost of living. The consequences of the war in Ukraine and the sanctions against Russia have not gone unnoticed. In March, Germany's inflation rate hit its highest level since 1981. The German government is keen to press ahead quickly with an embargo on Russian coal, but it is still wrangling over whether to ban imports of Russian gas and oil.
Image: Moritz Frankenberg/dpa/picture alliance
Rush to fill up in Kenya
Cars wait in line at gas stations in Nairobi. Here, too, people are noticing the effects of the war in Ukraine. Fuel is expensive, and in short supply - not to mention the food crisis. At the UN Security Council, Kenya's UN ambassador Martin Kimani expressed concern, comparing the situation in eastern Ukraine to the changes that took place in Africa after the end of the colonial era.
Image: SIMON MAINA/AFP via Getty Images
Who will secure supplies to Turkey?
Russia is the world's largest producer of wheat. Because of the ban on Russian exports, the price of bread is now rising in many places – including here, in Turkey. International sanctions are disrupting supply chains. Ukraine, too, is one of the five biggest exporters of wheat in the world, but the war with Russia means it can't ship supplies from its ports on the Black Sea.
Image: Burak Kara/Getty Images
Wheat prices are soaring in Iraq
A worker piles up sacks of flour at the Jamila market, a popular wholesale market in Baghdad. Wheat prices have skyrocketed in Iraq since Russia invaded Ukraine, as the two countries account for at least 30% of the world's wheat trade. Iraq has remained neutral so far, but pro-Putin posters have now been banned in the country.
Image: Ameer Al Mohammedaw/dpa/picture alliance
Protests in Lima
Demonstrators have clashed with police in the Peruvian capital Lima. They are protesting against the rise in food prices, among other things. The crisis has been exacerbated by the war in Ukraine. Peruvian President Pedro Castillo temporarily imposed a curfew and a state of emergency, but when these were lifted, the protests resumed.
Image: ERNESTO BENAVIDES/AFP via Getty Images
State of emergency in Sri Lanka
In Sri Lanka, too, people have taken to the streets to express their anger. A few days ago, some even tried to storm the private residence of President Gotabaya Rajapaksa. Mounting protests against the rising cost of living, fuel shortages, and power cuts prompted the president to declare a national state of emergency, and to ask India and China for help procuring the resources his country needs.
There have been protests against rising food and energy prices in Scotland, too. All over the UK, trade unions have been organizing demonstrations to protest the rising cost of living. Brexit had already resulted in price increases in many areas of life, and the war in Ukraine will only make things worse.
Image: Jeff J Mitchell/Getty Images
How much is the fish?
The British have reason to worry about their beloved national dish. Around 380 million portions of fish and chips are eaten in the UK every year. But the tough sanctions now mean that prices for white fish from Russia, cooking oil, and energy are all rising. In February 2022, the UK inflation rate was 6.2% year-on-year.
Image: ADRIAN DENNIS/AFP via Getty Images
Economic opportunity for Nigeria?
A trader in Ibafo, Nigeria, packages flour for resale. Nigeria has long wanted to reduce its reliance on imported food, and to make its economy more resilient in other areas as well. Could the war in Ukraine provide opportunities for Nigeria? Aliko Dangot, Nigeria's richest man, recently opened the country's largest fertilizer plant, and is hoping he will have plenty of buyers.
Image: PIUS UTOMI EKPEI/AFP via Getty Images
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The report said Putin was resorting to patently unsustainable, dramatic fiscal and monetary intervention to smooth over structural economic weaknesses.
It added that the Russian government budget had gone into deficit for the first time, and the Kremlin's finances are "in much, much more dire straits than conventionally understood."
Meanwhile, the authors said Russian financial markets — with an eye on future outlook — were the worst performing in the world, limiting capacity to tap new investment to revitalize the economy.
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'Cherry-picked' statistics
"Since the invasion, the Kremlin's economic releases have become increasingly cherry-picked, selectively tossing out unfavorable metrics while releasing only those that are more favorable," the study said.
"These Putin-selected statistics are then carelessly trumpeted across media and used by reams of well-meaning but careless experts in building out forecasts which are excessively, unrealistically favorable to the Kremlin."
New figures for Russian industrial production for June show that it was significantly depressed across a range of sectors compared with last year.
For cars, production was down by 89%, while for fiber optic cables it dropped by almost 80%.
"Defeatist headlines arguing that Russia's economy has bounced back are simply not factual — the facts are that, by any metric and on any level, the Russian economy is reeling, and now is not the time to step on the brakes," it said.
A separate study by the German Institute for International and Security Affairs published in June also suggested that the Russian economy was in dire straits, despite having held up well initially in the face of sanctions.
"The sanctions' effects are only just beginning to unfold: Supply-chain problems are intensifying and demand is falling quickly."
"In the longer run, Russia's economy will become more primitive as it partially decouples from international trade," it said.
"To avoid social tensions, the government will intervene to support Russian businesses, leading to more protectionism and a larger state footprint in the economy."
