17.11.2025
Russia’s economic activity is projected to weaken markedly after two years of war-related overheating. After a sharp slowdown in 2025 due to capacity constraints and tight monetary policy, real GDP growth is forecast at 0.8% in 2025, followed by a modest pick-up to 1.1% in 2026 and 1.2% in 2027. Private consumption is expected to remain a key growth driver, while investment is projected to stagnate in 2025 before recovering gradually as inflation declines and interest rates ease. Inflation is forecast to fall from elevated levels but remain significant, while public finances are projected to stay in deficit and public debt to rise over the forecast horizon.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 0.8 | 1.1 | 1.2 |
| Inflation (CPI, %, yoy) | 8.9 | 5.4 | 4.6 |
| Unemployment rate (%) | 2.3 | 2.6 | 2.8 |
| General government balance (% of GDP) | -3.1 | -2.7 | -2.4 |
| Gross public debt (% of GDP) | 22.1 | 24.2 | 25.6 |
Growth outlook: consumption resilient, investment constrained
After a contraction in 2025-Q1, Russia avoided a technical recession in 2025-Q2. High-frequency indicators point to weak activity in the second half of 2025. Private consumption is expected to stay relatively supportive (helped by resilient real wage growth in a tight labour market), while investment is forecast to be subdued under high interest rates and structural constraints, before a gradual recovery in 2026–27.
Inflation: gradual disinflation under tight monetary conditions
Inflation is projected to fall only gradually, reflecting still-strong domestic price pressures and the lagged effects of high interest rates. CPI inflation is forecast to average 8.9% in 2025, before easing to 5.4% in 2026 and 4.6% in 2027.
Public finances: deficits persist, debt rises
Weaker hydrocarbon revenues and elevated spending pressures are expected to keep the budget in deficit. The general government balance is forecast at -3.1% of GDP in 2025, improving gradually to -2.4% by 2027, while gross public debt is projected to increase to 25.6% of GDP by 2027.
Source: European Commission. European Economic Forecast, Autumn 2025.
