Central Bank maintains forecast for Russia's GDP growth in 2026 at 0.5%-1.5%, at 1.5%-2.5% for 2027

MOSCOW. April 24 (Interfax) - The Central Bank of Russia has maintained its forecast for Russia's GDP growth in 2026 at 0.5%-1.5%, the same as in the previous February version of the forecast, according to the Central Bank's medium-term forecast published following a meeting of the board of directors at which it lowered the key rate by 50 basis points (bps) from 15% to 14.5%.

In addition, the Central Bank kept its forecast for Russian economic growth at 1.5%-2.5% in 2027 and also at 1.5%-2.5% in 2028.

At the same time, the CBR noted that the dynamics of the Russian economy in Q1 were largely driven by one-time factors, including adjustments to tax changes, calendar and weather factors.

"Domestic demand dynamics have roughly corresponded to the economy's capacity to ramp up supply of goods and services," the CBR said.

"According to high-frequency data, the Russian economy slowed in 2026 Q1, in part due to the adjustment to the earlier tax changes. The other contributors were a fewer number of business days and unfavourable weather conditions. Investment activity remains subdued. Consumer demand growth continues to decelerate, despite a slight pick-up in March. Taking into account that economic activity dynamics in 2026 Q1 were largely driven by one-off factors, the Bank of Russia has retained its GDP growth forecast for 2026 at 0.5%-1.5%," it said.

The Central Bank still expects year-on-year GDP growth of 1.0%-2.0% in Q4 2026.

The Central Bank reiterated that "labor market tightness is gradually decreasing." "According to surveys, the percentage of enterprises experiencing labor shortages continues to shrink and is now at its lowest level since mid-2023. Companies are planning more moderate wage indexations in 2026 compared to 2023-2025. Meanwhile, unemployment remains at historical lows, and wage growth is still outpacing growth in labor productivity," the regulator said.

The Russian Economic Development Ministry has estimated Russia's GDP fell 1.8% year-on-year in January-February and 1.5% and 2.1% in February and January, respectively.

The decline in 2M is largely explained by the calendar factor, the ministry said. "The dynamics for the second consecutive month are largely driven by the calendar factor - in February 2026 there was one less working day than in February 2025 - in January 2026 there were two fewer working days than in January 2025," the ministry has said.

Economists polled by Interfax in early April forecast GDP growth for 2026 at anything from 0.4% to 1.8%, in other words no economic downturn is expected. The consensus forecast for Russian GDP growth in 2026 is 1.0%, the same as the previous month's forecast. This is slightly lower than the Econ Ministry's official forecast in September of last year for 1.3% growth, but the ministry has already said it would revised this down when it updates its macro forecast in late April-early May.

In 2027, analysts expect the Russian economy to grow by 1.7%, significantly lower than the Econ Ministry's expectations for 2.8% growth and in line with the Central Bank's forecast of 1.5%-2.5%.