Analysts have downgraded their forecasts for Russia’s GDP growth in 2025, casting doubt on the economy’s ability to reach the Ministry of Economic Development’s target of 1% growth, Kommersant reported on December 16.
The Institute for Economic Forecasting (IEF) of the Russian Academy of Sciences expects economic growth of 0.7%. In its updated macroeconomic forecast, the IEF said the revision was due to stagnating output between January and September and weakening domestic demand. Raiffeisenbank analysts, in their soft-landing scenario, estimate Russia’s GDP growth in 2025 at 0.9%.
IEF economists note that the Russian economy has effectively stopped growing.
According to Rosstat, on a seasonally adjusted quarter-on-quarter basis, GDP dynamics amounted to minus 0.7% in the first quarter, plus 0.3% in the second, and plus 0.1% in the third. In year-on-year terms, Rosstat data show growth in the third quarter slowed to 0.6%. Financial and budgetary conditions are reinforcing the inertial nature of current trends, the IEF believes.
Experts attribute the slowdown to a combination of tight monetary policy and a shift toward a more restrained fiscal policy, which is weakening domestic sources of growth. Falling oil and gas revenues, a strong ruble, and slowing imports are worsening the dynamics of budget revenues, limiting the scope for further fiscal stimulus without an increase in the budget deficit.
