Economic pressure was one of the ways in which the West hoped Russia would be brought to heel after its invasion of Ukraine. Yet last year the Russian economy grew by 3.6 per cent, far faster than most countries in Europe.

What’s more, this year Russia is likely to grow by about 3 per cent What on earth has happened? At the risk of being accused of teaching grandmothers to suck eggs, let me go back to basics. Extra expenditure unleashed by a war can give a boost to the economy.

Vladimir Putin’s economy is facing increasing pressure on a number of fronts. Credit: AP

This is what happened to Germany in the 1930s. There was also a huge increase in war production in the US, initially to meet export orders including from the UK, and subsequently to equip its own massively expanded armed forces.

This expenditure was a key factor in lifting those economies out of the Great Depression. If an economy enters a war with unemployed resources, including labour, then the extra production of war material is effectively free. It employs resources which would otherwise be unused.

Moreover, such a boost to demand can deliver an increase in non-war production as the recipients of extra income from war production spend their money. But these gains are limited. They can only occur in economies with unemployed resources and they end when the unemployed resources are exhausted.

One way of escaping from this constraint is to draw in extra resources by importing more from abroad or exporting less, thereby causing the current account of the balance of payments to deteriorate. But that too has its limits. Once they are reached, extra production for war purposes must come at the expense of reduced production for something else – ordinary consumption or investment.

When the Ukraine war began, Russia did have a margin of unemployed productive capacity, including labour. Extra demand was therefore able to draw forth increased production. But this margin of unemployed resources was quickly used up.

After that point, with resources fully employed, extra demand brings inflationary pressure. Last year, the Russian inflation rate averaged 5.9 per cent. This year it is likely to be about 7.5 per cent. So much for Economics 101. Now for the West’s policy stance.