The World Bank’s latest forecast indicates that Russia’s economy is on a path toward stagnation rather than experiencing a “managed slowdown.” The organization revised its growth expectations downward, warning that economic output is unlikely to increase by more than 1% annually until 2028.
The bank now anticipates that Russia’s GDP will grow by 0.9% in 2025, a decrease from its previous estimate of 1.4% made in June. For 2026, it projects a growth of 0.8% and 1% for 2027. Additionally, it foresees a 0.4% drop in investment this year, with a further decline of 0.2% next year before a modest recovery in 2027.
Falling oil prices, decreased exports, and high interest rates were identified by the World Bank as significant obstacles to growth. The institution noted that fiscal stimulus measures have mostly played out, while private demand and investment are under considerable strain. A persistent shortage of labor is also expected to constrain production.
The bank projects that Russia’s budget deficit will increase to 2.9% of GDP this year, surpassing the Finance Ministry’s estimate of 2.6%, and it is expected to hover around 2.7% in 2026 and 2027.
On a more positive note, inflation is predicted to decrease from 7.5% this year to 4.5% in 2026 and further to 4% in 2027.
Other analysts are also revising their growth forecasts downward. The Kremlin-affiliated think tank CMAC expects GDP growth to be just between 0.7% and 1% this year and between 1.4% and 1.7% in 2026. Meanwhile, a consensus of economists surveyed by Russia’s Central Bank in September lowered their growth expectations for 2025 to 1.6%.
Official predictions remain more optimistic, with the Economy Ministry forecasting a growth of 1% this year and 1.3% in 2026, expecting an acceleration to roughly 2.5% to 2.8% later in the decade. The Central Bank projects GDP to grow between 1% and 2% in 2025 and up to 2.5% by 2028.
Business leaders, however, express less confidence. Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, commented, “Whether it’s a cooling or a controlled soft landing for the economy, it’s neither very soft nor very controlled.”
Analysts are noting a growing disparity between defense-related industries, which are boosting growth, and the civilian sectors that are experiencing significant declines.
According to estimates from CMAC, output in non-military industries has decreased by 5.4% this year, leaving about a third of Russia’s real-sector companies in a state of severe financial distress.
