Russia’s economic growth is slowing faster than expected, according to Economic Development Minister Maksim Reshetnikov. Although the economy has shown resilience under the Western sanctions imposed in 2022, the latest data indicate a quicker cooling than anticipated. Consequently, the Economic Development Ministry is revising its macro‑economic forecasts, including stress scenarios, which will be submitted to the government soon.
In April, the ministry kept its 2025 GDP growth projection at 2.5% but lowered several key indicators. Inflation was raised to 7.6% from 4.5%, the average Brent crude price forecast was cut to $68 per barrel from $81.7, and real investment growth was trimmed to 1.7% from 2.1%. The central bank has adopted a more cautious stance, projecting medium‑term growth of 1‑2%.
According to Russia’s Federal State Statistics Service, GDP grew 1.2% in the first half of 2025. Earlier this year, Reshetnikov warned that the economy was on the brink of recession, emphasizing that the outcome would depend on policy choices, particularly interest‑rate decisions. Finance Minister Anton Siluanov, using the ministry’s estimates, expects GDP to expand by at least 1.5% next year.
The Bank of Russia has been tightening monetary policy to curb surging inflation, raising its key rate to a record 21% in October 2024. It subsequently lowered the rate to 20% and then to 18% in mid‑2025, citing easing inflationary pressure. The regulator has not ruled out reducing the rate further to 10.5% in 2026 if inflation falls to 4%. These moves mark the first easing cycle since 2022, when policy was tightened to stabilize the economy under sanctions.
The revision of Russia’s economic forecasts comes as the country continues to navigate the challenges posed by Western sanctions. The updated forecasts will provide a clearer picture of the economic outlook, reflecting current dynamics and the global situation. As the Russian government considers its next steps, these revised forecasts will play a crucial role in informing policy decisions and shaping the country’s economic future.
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