Russia is undergoing 'reverse industrialization' as limited resources force a retreat from high...

Russia is experiencing "reverse industrialization" as Western sanctions and its continued war on Ukraine weigh on long-term economic growth prospects, Finland's central bank said.

While 2022 saw Russia hit with a "financial shock, a trade shock, and an uncertainty shock," its GDP proved more resilient than expected, only contracting by 2.1%, Laura Solanko, a senior advisor for the Bank of Finland, wrote in a recent blog post.

But sanctions continue to weigh on the economy, she added, so businesses have switched to inferior or pricier inputs, with some shifting from high-tech to low-tech.