Russian macro: economic dichotomy hampers growth
In our previous reports, we mentioned that some officially announced data appeared odd amid slowing economic growth. While there’s no doubt about the general trends — the overall economy seems unhealthy, even if some sectors are doing relatively well — the constant revision of inconsistent statistics makes forecasting tricky. For example, Rosstat now estimates that the Russian economy grew by 4.9% in 2024 up from the initial 4.1%. Likewise, 2023 GDP growth was revised to 4.1% from much lower earlier estimates. For 2025, Rosstat currently reports just 1.0% growth. Could this unexpectedly low figure be partly due to the strong growth in 2024? Will the 2025 GDP be revised in the coming months? We don’t have answers, but these statistical quirks and ongoing revisions make it difficult to predict with confidence whether the economy will grow by 1.0% or 2.0% or any other level this year. On top of that, the Russian economy’s heightened sensitivity to geopolitical developments adds to the uncertainty. That’s why, in this report, we focus less on the numbers and more on a few qualitative trends and developments that might shed light on whether there is a tipping point ahead or the economy will simply continue muddling through with near-zero growth — especially given Rosstat’s recent report of a 0.2% GDP contraction in 1Q26.
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