Western observers have been closely monitoring Russia's economy for over three years, and recent trends show fluctuations between resilience and strain under sanctions. After slight GDP growth of 4.1% in 2023 and 4.3% in 2024, forecasts predict a sharp slowdown, with estimates of just 2% growth ahead. High interest rates, notably at 21%, severely limit private investment, affecting critical sectors like automotive and construction. While the ruble has appreciated due to geopolitical dynamics, overall economic indicators suggest a troubling trajectory, with some projections even expecting contractions in 2026.
Even though Russia has seen initial growth in GDP, economists predict a significant slowdown that could eventually see growth dropping to just 2% in the coming years.
The impact of high-interest rates, currently at 21%, is severely limiting private investment, particularly in key sectors like auto manufacturing and construction.
Despite the challenges, the ruble has appreciated by roughly 40% against the US dollar, primarily due to political shifts and statements from leaders that have changed market sentiment.
Analysts from the Kiel Institute for the World Economy project Russia's GDP growth will drop to as low as 0.8% by 2026, indicating ongoing economic concerns.
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