Despite Russia's GDP increasing by 4.1% in 2023 and 4.3% in 2024, growth is anticipated to decline. Economists predict a reduction in Russia's GDP growth rate to 2%. The German Kiel Institute forecasts even lower growth, estimating 1.5% for 2025 and 0.8% for 2026. The Russian central bank also projects moderate growth from 1% to 2% in 2025. High interest rates are significantly hindering private investment, particularly in the auto and mechanical engineering sectors, affecting overall economic performance.
One major drag is Russia's exorbitantly high interest rate, currently 21%, which is choking off private investment. The auto industry and mechanical engineering sectors are particularly hard hit.
Germany's Kiel Institute for the World Economy projects GDP growth of only 1.5% for 2025 and just 0.8% for 2026. Even the Russian central bank is expecting a slowdown, sticking to its lower forecast of between 1% and 2% growth for 2025.
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