Russia's economy is performing better than expected, despite the problems caused by extreme sanctions. The Bank of Russia has improved its forecast for inflation and GDP growth, predicting a range of 0.5-2% growth. This forecast is even more positive than that of the Ministry of Economic Development, which predicted 1.2% growth. Other indicators also suggest a bounce back and growth this year S&P Global released the services PMI index, which showed an extremely strong expansion of 58.1, and another good month for the manufacturing PMI. Companies and citizens have again demonstrated the ability to quickly adapt to new circumstances, and state support measures have helped the economy through a flurry of sanctions, said CBR governor Elvira Nabiullina in April presenting a much more upbeat outlook for 2023. Banks and other organizations of the financial sector worked stably, providing the country with the necessary financial resources. In March, contrary to all expectations of economists, the Russian industry showed growth for the first time since March 2022, thanks to the production of military goods. At the same time inflation has plunged and was only 3% in March, partly thanks to low base effects, but the CBR estimate it will end at about 8% -- one of the lowest levels in Europe. The heavy military spending is also expected to push inflation up this year, but the CBR seems to be well prepared for inflationary pressure. Russia's unemployment rate remains extremely low, falling to just 3.5% in February, while wage growth is being felt due to the labour shortage. The decline in Russia's working-age population is also influencing the labour supply, with the fastest decline being seen in the cohort of Russians aged 20-40 years, which accounts for most of the conscripts as well as those that have fled the country due to the war. The labour market is further affected by changing migration patterns, with a decline in the number of fresh workers from Central Asia and Caucasus regions. In January-February, nominal federal budget revenues plummeted by almost 30% y/y, while expenditures increased by about 50%, leading to a significant increase in the federal budget deficit, reaching nearly 4% of GDP for the 12-month period ending in February. However, in April, the budget is expected to go back into surplus and stay there for the rest of the year after the benchmark used to calculate taxes was changed. Previously the Urals price was used, but that is the price used on the European delivery routes which have collapsed. From April 1 Ministry of Finance is using a simple Brent minus a discount formula which will better capture the oil trade with Asia. That should see oil and gas revenues recover in the second half of this year. Despite the Western sanctions imposed on Russia in 2022, the Russian economy has managed to withstand it, according to Nabiullina. Speaking in the State Duma, she said that “State support measures were sufficient and prompt and helped the economy through a flurry of sanctions." The Central Bank has pursued a policy that ensured the preservation of financial stability and a fairly rapid restoration of price stability. Vladimir Putin finally decided to move on to direct nationalization of foreign assets. On April 25, the Kremlin issued a presidential decree allowing it to respond to the nationalization of Russian assets abroad by transferring the assets of foreign companies in Russia to the temporary administration of the Federal Property Management Agency. The first were the Russian assets of the Finnish concern Fortum, the largest investor in the Russian power industry, which in the spring of 2022 announced the impending sale of its Russian assets but could not sell them due to restrictions imposed by Putin's previous decrees.