Russia sees 2025 economic growth at 1.5%, one percentage point lower than the earlier official forecast, Finance Minister Anton Siluanov said at a Kremlin meeting on Wednesday.
Russia's economy, driven by exports of oil, gas and minerals, grew robustly over the past two years despite multiple rounds of Western sanctions imposed after its invasion of Ukraine in 2022.
But domestic activity has become strained in recent months by labor shortages and high interest rates introduced to tackle inflation, which has accelerated under record military spending.
At the Kremlin meeting, Siluanov told Russian President Vladimir Putin that the Economy Ministry now saw growth of at least 1.5% this year. The official forecast for 2025 was 2.5%.
“If this year we see rather tough conditions for the implementation of monetary and credit policy, we see that the rate of economic growth will nevertheless be no less than 1.5% this year, at least according to the assessment of the Economy Ministry,” Siluanov said.
Russia's war economy grew robustly at 4.1% in 2023 and 4.3% in 2024. But the Central Bank expects Russia's economy to grow by 1% to 2% this year.
Reuters in January reported exclusively that Putin had grown increasingly concerned about distortions in Russia's wartime economy, particularly with a cut to investment by major companies due to high interest rates.
During Putin's first two terms as president from 2000 to 2008, the size of Russia's economy soared to $1.7 trillion from less than $200 billion in 1999. But Russia's nominal GDP is now just $2.2 trillion, about the same level it was in 2013, the year before Russia annexed Crimea from Ukraine.
At Wednesday’s meeting, Russia’s Finance Minister also said that a balanced budget will give more opportunities to the central bank to soften monetary and credit policy, which means that credit resources will be more accessible.
“There are a lot of nuances in terms of ensuring economic growth. But on the whole, of course, I support this approach,” Putting told Siluanov.
