Russia's Econ Ministry keeps 2025 GDP growth forecast unchanged at 2.5%, lowers 2026 forecast to 2.4%
MOSCOW. April 21 (Interfax) - The Russian Economic Development Ministry's updated baseline forecast for GDP growth in 2025 is 2.5%, the same as the previous forecast it made last September, a ministry spokesman told reporters, citing draft forecast scenarios for Russia's socioeconomic development in 2025-2028 that the ministry has submitted to the government.
The ministry slightly lowered its GDP growth forecast for 2026 to 2.4% from the 2.6% projected last September, but left the forecast for 2027 unchanged at 2.8%. It expects 3.0% growth in 2028.
"We left our estimate for GDP growth in 2025 at 2.5%, based on the dynamic of the first quarter and long-term trends. We believe this estimate is quite realistic. Of course, it's lower than last year, because 4.3% [GDP growth in 2024] is very high. But some cooling of the economy, slowdown of growth is objective with such a base," the spokesman said.
Asked why the ministry is more optimistic about growth in 2025 than analysts and the Central Bank of Russia (CBR), he said the "ministry is looking at the trend of the first quarter - the economy is slowly slowing, but we don't expect a sharp drop. The CBR expects growth of 1-2% this year, while the consensus of analysts polled in April forecast 1.6%.
"In order to arrive at 1.5% growth for 2025, there needs to be a technical recession in some quarter. We're not factoring such a thing into the baseline scenario. In the stress scenario, this is possible, but that's why it's the stress scenario," the spokesman said.
"However, we slightly lowered the economic growth estimate for 2026, from 2.6% to 2.4%, which is related to the fact that the effect of, among other things, tight monetary policy, monetary and credit conditions will carry over to 2026," he said.
"As for the global economy and its turbulence, we, naturally, are factoring in a slowdown of global economic growth. We've factored this into the pace of exports and imports, and into the exchange rate, and into oil prices, which is most important," he said, commenting on how current developments in the global economy will affect growth in Russia.
"We are now factoring global economic growth of 2% and change for 2025 into the baseline scenario. The pace will be slower than previously expected, but we're not factoring in the possibility of a global recession. We're proceeding from the assumption that this matter with trade flows, trade wars and so on will probably not be universal. The world is bigger than the United States, after all, so some flows will be redirected and the Covid scenario, when world trade simply stopped for a time, all flows collapsed, won't happen, they will simply go differently," he said.
"But there is also the stress scenario, where we factor in the possibility of a global recession. It is not ruled out, but the chances are not very high," the spokesman said.
"We believe that our forecast is of a moderately conservative nature, meaning it's not too optimistic, but also not too pessimistic. Of course, volatility is very high and, foremost, external conditions related to fluctuations on the world market could also affect the parameters of the forecast and the parameters of the budget," he said.
The ministry has drafted several scenarios, including a more optimistic one, a more conservative one and a risk scenario, he said.
The presented baseline scenario assumes that current sanctions will generally remain in place for the whole forecast period to 2028, he said, remarking that "in the baseline scenario we're not factoring in any dramatic changes in this regard."
The conservative scenario assumes lower oil prices, but still projects Russian economic growth throughout the whole forecast period, though slightly slower than in the baseline scenario.
"In the baseline scenario, we don't rule out that the export price [for oil] collapses below the cut-off price [of $60 per barrel] for some period of time, but then it goes up. We don't deplete the [National Welfare Fund (NWF)] in this construct. In terms of the budget, these are tight, but alright conditions," the spokesman said, commenting on how the new forecast might affect the budget.
The CBR raised its GDP growth forecast for 2025 to 1.0-2.0% from 0.5-1.5%, but lowered its forecast for 2026 to 0.5-1.5% from 1.0-2.0%. Analysts polled by Interfax at the beginning of April forecast growth of 1.6% in 2025 and 1.7% next year.