28.08.202500:03:44UTC+00Russia Cuts 2025 GDP Growth Forecast to 1.5%

Russia anticipates a slowdown in economic growth, projecting an increase of 1.5% in 2025, a reduction from the earlier estimate of 2.5%, Finance Minister Anton Siluanov conveyed to President Vladimir Putin on Wednesday, as per Reuters. Despite facing numerous Western sanctions following its 2022 invasion of Ukraine, Russia's war economy demonstrated significant growth of 4.1% in 2023 and 4.3% in 2024. In June, Economy Minister Maxim Reshetnikov cautioned about the potential of a recession unless monetary policies were adjusted. The nation's military expenditure, the highest since the Cold War era, has fueled inflation, leading the central bank to raise the key interest rate to 21% in October, marking the highest rate since President Vladimir Putin's early tenure in 2003. Although the central bank reduced the interest rate to 20% in June and further to 18% in July, analysts note that the economy continues to be hampered by the burden of credit costs and workforce shortages.