Russia’s GDP Growth Slows in Q1 2025 Amid Tight Monetary Policy

Russia’s GDP growth rate in the Q1 of 2025 declined to 2% year-on-year compared to the Q1 of 2024, according to estimates provided in documents published by the Bank of Russia, The Caspian Post reports, citing TASS.

"According to the Bank of Russia’s estimate, which includes operational data for January through March, the GDP growth rate in the Q1 of 2025 declined to 2% relative to the corresponding period of the previous year, influenced in part by the mounting effects of tight monetary policy. The slowdown in economic activity is expected to continue into the second quarter of 2025, leading to a narrowing of the positive output gap," the statement said.

According to the Central Bank's forecast, the GDP growth rate will slow down to 1-2% in 2025 and to 0.5-1.5% in 2026. The share of investment in GDP will remain at the high level reached in 2023-2024. The contribution of consumer demand to GDP dynamics will increase in 2026-2027 as interest rates fall and the economy returns to a balanced growth path. In the baseline scenario, the Russian economy is expected to reach potential growth rates of 1.5-2.5 % in 2027.