The late US Senator John McCain once called Russia a “gas station masquerading as a country” and the fact that Russia’s nominal GDP is about the same as Italy’s has long been used to dismiss it as unimportant.

However, economists have long argued that considering only Russia’s nominal GDP of around $2 trillion is to underestimate its economic strength. Arguably, the belittling of Russia over the last decade has led Western leaders to badly miscalculate how vulnerable the Kremlin is to sanctions.

Looking at GDP in PPP (purchasing power parity) terms removes price level differences and allows a better comparison, especially of living standards, between countries.

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