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Growth reserve: the Central Bank ruled out the transition of the Russian economy to the stage of recession
The available statistics, together with forecast calculations, show that there is no probability of the Russian economy entering a recession in 2025, Kirill Tremasov, adviser to the Governor of the Bank of Russia, told reporters at a communication session explaining monetary policy. Izvestia investigated which key macroeconomic factors make it possible to exclude the possibility of a recession, as well as which sectors of the economy will be the drivers of growth in the next two years.
Reasons for stability
The Central Bank reminded Izvestia that the Bank of Russia's medium-term forecast shows no signs of recession in the coming years. The economy showed an increase of about one percent in the first eight months, Dmitry Kulikov, senior director of the ACRA group of sovereign and regional ratings, told Izvestia. With this result, even weak indicators in the remaining months are unlikely to be able to reduce the annual total to a minus — this would require a very strong external impact. In addition, statistics tend to adjust over time: preliminary business activity figures are usually revised upward later. Therefore, in a few months, the beginning of the year is likely to look more successful than it initially seemed.
"I would expect GDP growth for the full year 2025 to be slightly above 1% and December—to—December inflation at about 6%," the expert said. "2026 may well show higher real GDP growth, but not dramatically higher. There are still many restrictions in place, among which one of the most important is the tight labor market. It is impossible to completely exclude the possibility of a recession, because we know from history and our own experience that recessions happen and often their onset is unnoticeable until the very last moment. At the moment, a recession is a stress scenario event.
Over the past four years, the accumulated growth in real investments has amounted to 36%, Sergey Grishunin, managing director of the NRA rating service, told Izvestia. Against this background, the Russian economy is unlikely to enter a recession, however, we are unlikely to see a disinflationary scenario.
— Most likely, in 2026 we will see growth of 1.5%, but hardly more, as the high rate will not allow private business to actively develop. There is hope for 2027, where growth may reach 2-2.5%. It should be noted that this growth is very small and much lower than that required by the Russian economy as an emerging market, the expert believes.
The economy reached a "new plateau" and showed steady, albeit moderate, growth, Maxim Maksimov, associate professor of Innovation and Industrial Policy Management at Plekhanov Russian University of Economics, told Izvestia. Despite the high costs, the budget maintains an acceptable deficit level (around 2.1%) due to timely government actions. This provides an opportunity for a flexible budget policy and support for key industries without a sharp increase in government debt.
Key areas
The recession is a kind of "red line" for the state, which cannot be crossed under any circumstances, Alexander Abramov, head of the laboratory for the analysis of institutions and financial markets at the Presidential Academy, told Izvestia. The Economic Bloc, together with the Central Bank, has all the means to prevent the occurrence of such a scenario.
"Reducing the Central Bank's key interest rate will work against a recession in the coming months," the expert believes. — If this is not enough, there are two other mechanisms.: These are budget investments and accelerated wage growth in business, along with the indexation of retirees' incomes. As a result, consumer demand is likely to remain the main factor supporting growth in 2025-2026, and the government has the opportunity to influence its volume.
In addition to monetary regulation measures, according to him, the acceleration of growth will be facilitated by those industries that benefit most from a reduction in the key interest rate or are relatively less dependent on investments in real assets.
"This is a financial and professional activity in the securities market," the expert emphasized. — The growth will also affect many manufacturing industries, especially those that receive support from defense spending, partly construction and agriculture. Construction will be stimulated by easing monetary policy, while agriculture will be stimulated by continued solvent demand from the population.
During the period of sanctions, the Russian economy has gained significant experience in operating in unstable macroeconomic conditions, Andrei Zhukovsky, senior researcher at the Institute of Regional Economics and Inter-Budgetary Relations at the Financial University under the Government of the Russian Federation, told Izvestia. In practice, such mechanisms as flexible changes in the key rate, currency interventions, careful steps by the regulator on international financial platforms, selective regulation of the securities segment, as well as continuous improvement of the legislative framework in accordance with current realities were tested.
"As key factors, I would mention gold and foreign exchange reserves, the formed National Welfare Fund, timely and coordinated actions of the Central Bank, the Ministry of Finance and other government authorities responsible for monetary policy," the expert said. — Together, this allows us to respond to the most serious challenges in a timely manner.
In his opinion, in the next two years, the main source of economic recovery will be companies that are already moving the industry towards technological independence, working in the field of import substitution and having a portfolio of long-term orders for high-value-added products. In particular, this applies to aircraft construction, shipbuilding, digital technologies and IT solutions in the financial sector, focused on both business and government. The food industry and related areas of agricultural production also play a special role.
Possible barriers
The main source of risk is the rapid volatility of the situation in the global currency and commodity markets, Andrei Zhukovsky believes. This may result in increased competition for access to large-scale markets for both raw materials and high-tech goods.
"Our country has traditionally been fighting for a place in the sun here and will be able to compete with it, especially with increasing import substitution and the gradual localization of high—tech industries within the country," said Andrei Zhukovsky.
There are two main risks, Alexander Abramov noted. In his opinion, the first one is that a decrease in the pace of monetary regulation or a moderate easing of fiscal policy can cause a new surge in inflation, which, in turn, will lead to a long-term high key interest rate. The second risk, according to him, is related to a possible further decrease in Russia's export revenues due to the unfavorable global environment and sanctions on energy resources and other goods intended for export.
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