The Russian economy is struggling to meet even the most cautious forecasts of the Central Bank, writes Bloomberg, citing the latest government data and analysts' estimates.
According to the Ministry of Economic Development, Russia's GDP grew by only 1.1% in the first seven months of this year. This barely exceeds the lower boundary of the Central Bank's forecast for 2025—a growth of 1-2%. Analysts believe that current trends indicate that growth for the entire year may not even meet the most conservative forecasts and could fall below 1%.
Meanwhile, in July, GDP growth fell to 0.4% compared to June's figure of 1%. Industrial production growth also slowed—to 0.7% from 1.9% amid a slowdown in manufacturing. According to Olga Belenkaya, an analyst at the Moscow investment company Finam, industrial production is declining for the second consecutive month when adjusted for seasonality.
Dmitry Polevoy, investment director at Moscow's Astra Asset Management, predicts that GDP growth for the entire year will be around 0.7% if current trends continue.
The head of the Central Bank, Elvira Nabiullina, claims that investment activity will remain high this year despite the high cost of borrowing, but she admits that the main reason for this is government support for "priority sectors" such as the military industry.
However, independent surveys of entrepreneurs suggest otherwise. "High interest rates and declining corporate profits have a significant impact on investment activity," says Elena Astafyeva, commercial director of the TenderPro procurement platform in Moscow. TenderPro survey results show that the number of investment projects for businesses has decreased by 13% this year.
Meanwhile, officials are in no hurry to temper their optimism. The Ministry of Economy still officially forecasts a growth of 2.5% by the end of the year. Finance Minister Anton Siluanov told Vladimir Putin at a government meeting this week that according to a new, yet unpublished estimate, growth will be no less than 1.5%.