Russia downgrades 2026 economic growth forecast to 0.4% from 1.3%, deputy PM says
Deputy Prime Minister Alexander Novak said the government expects growth to slow as oil prices and revenues weaken and inflation stays elevated at 5.2%.
- On Tuesday, Deputy Prime Minister Alexander Novak announced Russia cut its 2026 GDP growth forecast to 0.4% from 1.3%, signaling mounting concerns over the durability of the nation's wartime economic model.
- The Economic Development Ministry reported a 0.3% first-quarter contraction, as Novak attributed the slowdown to weaker oil revenues, high inflation, and military spending demands straining the economy.
- Inflation is projected to remain elevated at 5.2%, while Novak set the 2026 oil price assumption at "conservative" $59 per barrel to contain budget spending amid rising military demands.
- Households face a difficult year ahead as real income growth is forecast to slow to 1.6% from 7.7% last year, while consumer spending growth is expected to ease to 1.2% from 4%.
- Growth is forecast to recover to 1.4% in 2027 and reach 2.4% by 2029, though economist Dmitry Polevoy warned that "apparently higher level of budget spending" remains the main risk, with projections below the 3.5% expansion threshold needed for sustainable development.
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Russia cuts economic forecast as war bites further
Russia cut its growth forecast for the year from 1.3% to 0.4%, further signs of the country’s faltering war economy. Businesses are increasingly struggling to pay their debts, Fortune reported, with growing defaults threatening a quarter of the bond market. Punishingly high borrowing costs have damaged manufacturing and business investment but failed to slow inflation, driven by huge military spending and a shortage of labor caused by military r…
After a weak first quarter, the Russian government has significantly reduced its growth forecast.
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The Russian Government revised the economic growth forecast based on the 2026 results; the September forecast for the Russian Federation ' s Ministry of Economic Development was expected to grow by 1.3 per cent; and now, according to Alexander Nowak, the Russian Government ' s Vice-Premier, it is expected to grow by only 0.4 per cent.
Russia Cuts 2026 Growth Forecast as Oil Revenues and Wartime Pressures Weigh on Economy
Russia sharply downgraded its economic growth forecast for 2026, signaling the government is bracing for a prolonged slowdown as weaker oil revenues, high inflation and heavy wartime spending strain the economy.
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