President Vladimir Putin’s efforts to protect Russia after past rounds of US sanctions are leaving the economy more insulated as the threat of more penalties rattles markets this week.

Four years after the first major curbs were imposed over the Ukraine crisis, Russia’s economy is growing about as fast as the central bank thinks it can, thanks to policies that have allowed the currency to trade freely and reduced reliance on foreign capital. But that very self-restraint means growth is hardly enough to achieve Putin’s goals of dramatically raising living standards.

Data due as early as Friday will show gross domestic product added 1.9 per cent last quarter from a year earlier, compared with 1.3pc in the first three months, according to the median of 20 forecasts in a Bloomberg survey. That compares with the Bank of Russia’s estimate of 1.8-2.2pc.

Facing a long-term drag as sanctions limit access to foreign technology and capital, Russia has countered by revamping its fiscal and monetary policy, channelling extra income into a sovereign wealth fund and unloading most of its holdings of US Treasuries. While domestic assets have suffered as sanctions damage sentiment, Russia is less vulnerable to outflows of foreign capital than its embattled peers such as Turkey.

“Russia is more prepared,” said Charles Robertson, global chief economist at Renaissance Capital. “They are trying to say that however bad it gets, the government isn’t going to be borrowing much money, it will not be requiring financing from abroad.”

Congress is weighing a draft legislation proposing more sanctions that target Russia’s sovereign debt and its largest banks, as a response to alleged election meddling. The US State Department also announced new restrictions to punish Putin’s government for the nerve-agent attack on a former spy and his daughter in the UK.

Bloomberg/The Washington Post Service

Published in Dawn, August 11th, 2018