World Bank Predicts Three Years Of Stagnation For Russia's Economy
- 7.10.2025, 19:10
Details.
The economic slowdown is not a "managed cooling", as the government says, but an entry into stagnation, according to an updated forecast by the World Bank. It expects Russia's economic growth will not exceed 1% until 2028. Compared to the June version, expected GDP growth has been lowered from 1.4% to 0.9% this year, from 1.2% to 0.8% next year and from 1.2% to 1% in 2027, reports The Moscow Times.
Most of the key parameters have deteriorated. The WB expects investment to decline already at the end of this year (by 0.4%), next year it will fall by 0.2% and return to growth only in 2027 (1.1%). The growth of consumption will slow down, especially private consumption - it will grow by a little more than 1% a year.
It is difficult to make forecasts of the Russian economy now, the WB admits: the war has changed it a lot, and many data have become unavailable. But its experts do not see any factors that would avoid stagnation. Oil prices have fallen, and with them exports and budget revenues. Government spending has stabilized - no longer relying on fiscal stimulus - while private demand and investment are being undermined by high interest rates, the WB notes. In addition, staff shortages will continue to limit growth.
The WB does not share the authorities' optimism about reducing the budget deficit. The Finance Ministry expects a hole of 2.6% of GDP this year and its gradual reduction to 1.6% next year and 1.2-1.3% in 2027-2028. According to the WB forecast, this year the deficit will amount to 2.9% of GDP, and the next two years it will be slightly less - 2.7% of GDP.
But the WB believes in success in the fight against inflation: its forecast is 7.5% this year, 4.5% in 2026 and 4% in 2027.
Other experts are also gradually reducing expectations for the Russian economy. In September, TsMAKP, a think tank close to the authorities, worsened its growth forecast from 1-1.4% to 0.7-1% this year, from 1.5-1.8% to 1.4-1.7% next year, from 1.8-2.2% to 1.3-1.7% in 2027, and from 1.9-2.3% to 1.5-1.9% in 2028.
The August consensus forecast of the Center for Development of the Higher School of Economics (HSE) is 1.2% growth this year, 1.4% next year, and 1.7% in 2027-2028. The consensus of 33 analysts surveyed by the Central Bank (Central Bank Deputy Chairman Alexei Zabotkin called it a "second opinion" for the regulator) was also worsened in September: 1.2% this year, 1.6% next year and 1.9-2% in 2027-2028. Sophia Donets, chief economist at T-Investments, forecasts GDP growth below 1% this year and next year.