Inflation in Russia in 2025 will be 6.8%, slowing to 4% by end of 2026 - minister

MOSCOW. Sept 24 (Interfax) - The Economic Development Ministry has lowered its inflation forecast for Russia in 2025 to 6.8% from 7.6% in the April version, Economic Development Minister Maxim Reshetnikov said at a government meeting where the ministry's macro-forecast for 2025-2028 is being considered.

"A significant factor for the growth of real incomes is the slowdown in inflation. The inflation forecast for 2025 has been lowered to 6.8% [7.6% was expected in April]. This has become possible thanks to the Central Bank of Russia's policy and government measures. By the end of 2026, we forecast reaching the Central Bank's target level of 4%. The inflation forecast takes into account the indexation of tariffs in accordance with previously adopted decisions," Reshetnikov said.

A slowdown in GDP growth rates is expected in 2025-2026 - to 1% in 2025 and 1.3% in 2026 - following the very high (over 4%) growth in 2023-2024, he said.

"This is a consequence of reduced inflationary pressure, which is necessary to achieve balanced and sustainable growth rates in subsequent years," he said.

"It is important that positive growth rates are maintained throughout the forecast horizon with a gradual acceleration in 2027-2028 [2.8% and 2.5%, respectively]," he said.

"The main driver of growth for all three years will remain domestic demand, primarily consumer demand," he said.

"The basis of demand is the growth of real wages and household incomes. Over the three years, real wages will grow 10%, real monetary incomes more than 9%. Demand will also be supported by a gradual reduction in the savings rate as monetary policy normalizes. A low level of unemployment will be maintained throughout the forecast horizon. Labor constraints will be alleviated through increased production efficiency and growth in labor productivity," he said.