The government is revising growth and inflation forecasts, Economic Development Minister Maksim Reshetnikov has said
Russian growth is losing momentum more quickly than anticipated, Moscow’s Economic Development Minister Maksim Reshetnikov has said.
Since the escalation of the Ukraine conflict in 2022, Russia has operated under sweeping Western sanctions aimed at isolating the country. Despite the restrictions, the economy has shown resilience, often outperforming forecasts.
However, “the latest data show the economy is cooling faster than expected,” Reshetnikov warned at the Eastern Economic Forum in Vladivostok on Thursday, adding that his ministry is revising its macroeconomic forecasts, including stress scenarios, and will soon submit them to the government. “Our analysts are assessing all factors and challenges, the current dynamics, and the global economic situation.”
In April, the ministry kept its 2025 GDP growth projection at 2.5%, unchanged from last autumn, but revised down key indicators. Inflation was raised to 7.6% from 4.5%, the average Brent crude price projection was cut to $68 per barrel from $81.7, and real investment growth was trimmed to 1.7% from 2.1%. The central bank, in its medium-term forecast, was more cautious, projecting growth of 1–2%.
Russia’s Federal State Statistics Service (Rosstat) said last month that GDP grew 1.2% in the first half of 2025. Earlier this year, Reshetnikov warned the economy was on the brink of recession, though he stressed this was not inevitable and would depend largely on policy choices, particularly interest rate decisions.
In late August, Russian Finance Minister Anton Siluanov told President Vladimir Putin that, according to the Economic Development Ministry’s estimates, GDP would expand by at least 1.5% next year. Siluanov noted that monetary policy remained tight after the central bank raised its key rate to a record 21% in October 2024 to curb surging inflation.
The Bank of Russia held the rate through three meetings before cutting it to 20% and then 18% in mid-2025, saying inflationary pressure was easing faster than expected.
The regulator has not ruled out lowering the rate to 10.5% in 2026 if inflation falls to 4%. The moves marked the first easing cycle since 2022, when policy was tightened to stabilize the economy when Western sanctions were imposed.
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