Russian Deputy Prime Minister Alexander Novak stated that the Russian economy has entered a phase of more moderate growth after the strong expansion recorded in the previous two years. The statement was made during a session at the Federation Council, in Moscow, this Friday (2)
According to the government, the slowdown is expected and is part of a process of “normalization” of the economy after the period of accelerated growth in 2023 and 2024. The official assessment is that the lower pace of expansion contributes to reducing inflationary pressures and creating conditions for the resumption of investments.
“After high growth rates in 2023-2024, the economy has moved to a more moderate pace. This is an expected phase: normalization after overheating and at the same time a prerequisite for reducing inflation. In August, GDP grew by 0.8% and 0.6% in the first eight months of 2026 compared to the same period last year. According to the revised forecast, we expect similar growth for the entire year,” said the deputy prime minister.
The result represents a significant slowdown compared to previous years. Russian Gross Domestic Product grew by 4.1% in 2023 and 4.9% in 2024, before slowing to around 1% in 2025. In 2022, the first year of the large-scale war in Ukraine, the economy had contracted by 1.4%.
Despite the lower pace of the economy as a whole, Novak highlighted sectors that continue to show above-average expansion. According to the deputy prime minister, the mechanical engineering complex accumulates growth of 6% in the year, while the pharmaceutical industry maintains double-digit expansion rates.
“Some sectors are growing more actively – mainly our mechanical engineering complex, which has grown by 6% since the beginning of the year. This includes the production of electronics, machinery, equipment, aeronautical and railway equipment and shipbuilding. The domestic pharmaceutical sector is also among the leaders – its growth rates have been kept in double digits for several years,” he said.
The government’s assessment is presented at a time of economic slowdown, but also of gradual reduction in inflationary pressures. Accumulated inflation since the beginning of the year reached 4.93%, according to data presented by Novak, who predicts a price increase of 6.8% by the end of 2026.
The Russian government also considers that economic projections can benefit from an improvement in external conditions, especially in the prices of the main commodities exported by the country.
“Overall, the forecast is traditionally moderately conservative. The external price environment may improve and have a positive impact on the country’s budget and economy as a whole,” he noted.
The predicted rate for 2026 represents a change from the period of strong expansion observed after the first year of the war. The growth in 2023 and 2024 was accompanied by an increase in public spending, expansion of industry and an increase in production related to the defense sector, but also by pressures on productive capacity, labor and prices.
For 2026, the Central Bank of Russia works with a growth projection close to 0% to 1%, while the Ministry of Economic Development predicts an increase of 0.6%.
The job market remains one of the main points of support for activity. The Russian unemployment rate is 2.2%, one of the lowest ever recorded in the country. At the same time, the shortage of workers is highlighted by the government itself as one of the factors that could limit faster expansion.
For comparison purposes, Russian performance occurs in a context of relatively low growth in part of Europe. In the second quarter of 2026, the European Union recorded expansion of around 1.2% year-on-year, while the euro zone grew approximately 1%. Among the bloc’s main economies, Germany and France had rates lower than those recorded by Russia during the period of greatest expansion in recent years.
For the coming years, projections point to a gradual recovery in the pace of Russian expansion. In the September survey, analysts consulted by the Central Bank projected growth of 1.2% in 2027, 1.7% in 2028 and 1.8% in 2029. The government’s forecast, presented by Novak, is more optimistic, with an increase of 1.4% in 2027 and 2.4% in 2029.
The trajectory also contrasts with the beginning of the war. In 2022, the first year of the Russian military operation in Ukraine, GDP fell by 1.4%. From 2023 onwards, however, the economy began to grow again, driven in part by an increase in public spending and production linked to the defense industry. Growth of 4.1% in 2023 and 4.9% in 2024 led the government itself and the Central Bank to talk about the risk of the economy overheating.
Source: www.brasildefato.com.br
