Russian economy's landing with GDP growth rates below 2% ceases to be soft - industry union head

MOSCOW. Sept 30 (Interfax) - The forecasted growth rates of the Russian economy in 2025 and 2026 indicate that it is time for the state to move from cooling it down to establishing a rebound, the head of the Russian Union of Industrialists and Entrepreneurs (RSPP) Alexander Shokhin said.

"It seems to me that indeed, this cooling or 'managed soft landing' is not very soft and not very managed. Why? Because at the beginning of the year, we assumed that the minimum economic growth rate, which during a managed contraction of the economy allows for solving a fairly wide range of tasks related to defense, security, social obligations and so on, and maintaining economic and investment activity is no less than 2% per year. And now we see that this year, we will be lucky to get a little over 1% by the end of the year, and next year 1.3%," Shokhin said on the Rossiya 24 television channel.

"This is low, undoubtedly. Therefore, it is very important that this period of cooling or managed contraction, or 'managed soft landing,' does not drag on, because a rebound is already needed. And the fact that the government has factored in 7% GDP growth over the three-year period in its forecast is somewhat reassuring," he said.

A figure of "2%-2.5% is that optimal economic growth rate for a non-overheated economy that indeed makes it possible to solve a wide range of tasks," he said.

According to the latest forecast from September, the Economic Development Ministry expects Russian GDP growth in 2025 at the level of 1.0% (the April version of the forecast was 2.5%), 1.3% in 2026 (previously - 2.4%), 2.8% in 2027 (unchanged from the previous forecast) and 2.5% in 2028 (previously - 3.0%).

In July, the Central Bank of Russia maintained its April forecast for Russian GDP growth in 2025 at 1.0%-2.0%. Central Bank Governor Elvira Nabiullina said at a briefing in mid-September that the trajectory of GDP dynamics is currently closer to the lower bound of the Central Bank's forecast. Analysts polled by Interfax in early September predict GDP growth in 2025 of 1.1%, with the consensus forecast falling from 1.4% in the poll in early August.