Russian Central Bank lowers 2026 GDP growth forecast to 0.0%-1.0% in 2026 from 0.5%-1.5%

MOSCOW. July 24 (Interfax) - The Central Bank of Russia has lowered the forecast for the country's GDP to grow to 0.0%-1.0% in 2026 from 0.5-1.5%, according to the regulator's medium-term forecast published following the board meeting, when the CBR trimmed the key rate by 25 basis points to 14.0% per annum from 14.25% pa.

The forecast for growth in Russia's GDP has been lowered to 0.0%-1.5% annualized in Q4 2026 from the previous 1.0%-2.0%.

The Central Bank has maintained the forecast for growth in GDP at 1.5%-2.5% in 2027 and 2028, respectively, and has announced projected growth of 1.5%-2.5% in 2029.

The Central Bank said that GDP grew at a moderate rate in Q2 2026, with consumer demand contributing primarily.

"According to high-frequency data, the economy as a whole grew moderately in Q2 2026. Economic growth was mainly driven by consumer demand. Investment activity recovered somewhat but remained moderate overall. However, the impact of the temporary contraction in production capacities on output in certain sectors increased since June. Businesses' expectations of future demand and output dropped over the past month. Among other things, this may indicate a slowdown in consumption growth in H2 2026. Overall, the 2026 GDP growth forecast was revised downwards to 0.0%-1.0%. The 2027-2028 forecast was not changed," the regulator said.

"The labor market tightness was gradually easing. According to survey data, business staffing levels increased. Companies' plans for wage indexations in 2026 barely changed. Wage increases slowed but continue to outpace labor productivity growth. Unemployment stays at its record lows," it said.

Russian GDP rose an estimated 0.3% year-on-year in May, the Economic Development Ministry has said. GDP had risen 1.3% in April and 1.9% in March, and fallen 1.0% in February and 1.7% in January. GDP grew 0.2% year-on-year in January-May 2026.

The Econ Ministry in May lowered its 2026 Russian GDP growth forecast to 0.4% from 1.3% in the September forecast, roughly at the mid-point of the Central Bank's forecast. The ministry's forecast for Russian GDP growth in 2027 is 1.4%, which is below the Central Bank's expectations.

Analysts polled by Interfax in early July forecast GDP growth of 0.7% in 2026 and 1.5% in 2027.