The International Monetary Fund (IMF) revised down its economic forecast for Russia’s year on year growth in 2025 from 1.5% to 0.6% of real GDP, according to its October 2025 World Economic Outlook.
The IMF projects Russia’s real GDP growth to fall sharply in 2025, from 4.3% growth in 2024, and to recover slightly to 1% in 2026.
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Russia’s economy is experiencing a natural slowdown after a robust growth, and it is a result of policy tightening, with high interest rates in Russia increasing the cost of borrowing and Russia planning to raise taxes to finance its budget.
The decrease of Russia’s economic growth also impacted the overall forecast for emerging economies.
“Growth in emerging and developing Europe is projected to decline substantially, from 3.5% in 2024 to 1.8% in 2025, and to recover modestly to 2.2% in 2026,” the World Economic Outlook says. “This is driven mainly by a sharp drop in the growth forecast in Russia”.
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The downgrade reflects a concentration of Russia’s fiscal spending in the last quarter of 2024, which boosted last year’s GDP to 4.3% from 4.1%.
Global oil prices fell 5.4% between March and August 2025 as weak demand and rising supply from OPEC+ and non-OPEC+ countries pushed prices down, reducing Russia’s oil revenues, the World Economic Outlook says.
Non-OPEC+ supply is expected to rise by 1.4 million barrels per day in 2025, while OPEC+ production increased 2.5 million barrels per day ahead of schedule. Falling prices and higher production continue to pressure Russia’s fiscal revenues and economic growth. Global oil demand is projected to grow by 0.7 million barrels per day next year, which may partially offset these losses.
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Despite slowing economic growth, Russia’s agricultural sector benefited from strong harvests in 2025, pushing cereal prices down 11.1%.
“Cereal prices dropped by 11.1% amid strong harvest prospects in major producing countries, such as the United States, Russia, Brazil, and Argentina,” the IMF World Economic Outlook says.
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Russia traded economic growth for the fourth year of its full-scale war in Ukraine
Russia is running out of the resources that have provided its economic growth for the past two years following the full-scale invasion of Ukraine, the head of the Central Bank of Russia, Elvira Nabiullina, said during the St. Petersburg International Economic Forum on June 19.
In 2022, the year the full-scale war began, Russia’s economy shrank by 1.4%. It rebounded afterward, outpacing the G7 average with growth of 4.1% in 2023 and 4.3% in 2024.
This year, the Economy Ministry projects that growth will slow sharply to just 1.0%, though Russian President Vladimir Putin described this as “deliberate.”
Russia’s heavy industries are cutting jobs and shortening work weeks as the country’s economy weakens in the fourth year of its full-scale invasion of Ukraine. From railways and car plants to cement, coal, diamonds and metals, major employers are cutting labor costs to cope with weaker demand at home and shrinking export markets abroad