Economic activity in Russia falls short of anticipated projections, according to the Central Bank.
## Adjusted Economic Forecast for Russia: A Shift Towards Balanced Growth
In a significant development, the Russian central bank has announced plans to revise its annual economic forecast, following a meeting held on July 25. The revision comes in response to slower-than-expected growth, with the initial estimate for 2025 GDP growth ranging between 1% and 2% [1].
### Current Predictions for GDP Growth in 2025
The predictions for GDP growth in 2025 vary among institutions, reflecting the challenges faced by the Russian economy. The Bank of Russia, for instance, has estimated growth to be between 1% and 2% [1]. The International Monetary Fund (IMF) initially projected growth at 1.5%, but recent developments suggest it may be even lower [3]. BNP Paribas Economic Research forecasts a decrease to 0.6% due to labor market deterioration and significant political uncertainty [4].
Meanwhile, the Ministry of Economic Development expects GDP growth of 2.5% in 2025 [2]. This optimistic outlook stands in contrast to the Bank of Russia's and IMF's more conservative projections.
### The Shift Towards Balanced Growth
Russian President Vladimir Putin, speaking at the St. Petersburg International Economic Forum in 2025, emphasized the need for a trajectory of balanced growth, marking a new goal for the Russian economy. This balanced growth implies moderate inflation and low unemployment [5].
To achieve this goal, the Central Bank aims to maintain a tight monetary policy for an extended period, with the key rate having been at 21% since October 2024 prior to a reduction to 20% on June 6, marking the first reduction in nearly three years [2]. However, Putin's statement suggests a shift towards a more lenient monetary policy.
Despite this shift, the president's speech did not indicate any immediate changes to the Bank of Russia's aim to maintain a tight monetary policy, as emphasized by Elvira Nabiullina, the Chair of the Central Bank [2]. Alexei Zaborotkin, Deputy Minister of Economic Development, noted that inflation in the second quarter is close to the April forecast range of 7-8% for the year [6].
### The Main Task for 2025
Putin emphasized that allowing stagnation and recession in the Russian economy is unacceptable. The president identified the main task for 2025 as ensuring a trajectory of balanced growth, a shift that could have significant implications for the Russian economy in the coming years.
References: [1] Bank of Russia (2025). Medium-term forecast. Retrieved from https://www.cbr.ru/eng/statistics/forecast/ [2] Reuters (2025). Russia's central bank cuts key rate by 100 bps, aims to maintain tight policy. Retrieved from https://www.reuters.com/business/russia-central-bank-cuts-key-rate-100-bps-aims-maintain-tight-policy-2025-06-06/ [3] International Monetary Fund (2025). World Economic Outlook Update, April 2025. Retrieved from https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/World-Economic-Outlook-Update-April-2025 [4] BNP Paribas Economic Research (2025). Russia: GDP growth to slow down in 2025. Retrieved from https://www.bnpparibas.com/en/institutional-clients/economic-research/research-articles/russia-gdp-growth-to-slow-down-in-2025 [5] Putin (2025). Speech at the St. Petersburg International Economic Forum. Retrieved from https://kremlin.ru/events/president/news/67749 [6] TASS (2025). Russian GDP growth in 2025 to be lower than in 2024, says Zaborotkin. Retrieved from https://tass.com/economy/1304361
In light of the revised economic forecast, the central bank's focus on finance may play a crucial role in achieving the Russian President's goal of balanced growth. The shift towards a more lenient monetary policy, as suggested by President Vladimir Putin, could potentially impact business decisions and investments within the Russian economy.
