“We expect to maintain positive GDP dynamics in 2026 at +0.4%,” Russian Deputy Prime Minister Alexander Novaksaid while presenting the government’s updated economic forecast.
Russia’s previous forecast projected GDP growth of 1.3%.
Novak also said Russia’s updated inflation forecast for 2026 stands at 5.2%, while the projection for 2027 remains unchanged at 4%, according to Interfax.
“Scenario conditions for socio-economic development through 2029 will be published by the Economy Ministry. The inflation forecast is 5.2% in December 2026 compared with December 2025. Annual inflation should reach the Central Bank’s target in 2027. For now, we see that inflation has slowed significantly and continues slowing,” Novak said.
Russia’s previous official forecast from September 2025 assumed annual inflation of 4% throughout 2026–2028.
“At the same time, it would be equally bad either to pursue the inflation target at any cost — including through a significant decline in economic output — or to overheat the economy with the risk of uncontrolled inflation growth,” Novak said.
Economist Andrei Gnidchenko from the Russian analytical center TsMAKP called the new forecast surprising.
Russia’s Economy Ministry estimates GDP contracted by 0.3% in the first quarter, while Russian dictator Vladimir Putin has reportedly demanded that the government and Central Bank accelerate economic growth.
According to Novak, the forecast is based on “conservative” assumptions, including an average Russian oil price of $59 per barrel this year and just $50 per barrel over the next three years.
That is lower than even the Russian Central Bank’s April forecast, which projected oil prices at $65 per barrel this year and $55 in 2027–2028.
Lower oil price expectations are intended to help restrain budget spending as Russia faces declining revenues — largely due to a strong ruble and falling oil prices — while military expenditures continue rising.
Economist Yegor Susin described the forecast as “not exactly a forecast, but rather a baseline assumption for the budget.”
The updated projection suggests a difficult year ahead for the Russian economy.
Investment decline is expected to continue in 2026, inflation will remain elevated at 5.2%, and real income growth is projected to slow to 1.6% after 7.7% last year.
Consumer activity growth is forecast to slow to 1.2% after reaching 4% in 2025. Unemployment is also expected to rise slightly to 2.3–2.4%.
The government expects the economy to gradually adapt afterward as the Central Bank lowers interest rates, with GDP growth projected at 1.4% in 2027 and 2.4% by 2029.
Even if those forecasts materialize, the projected growth rates remain far below the 3.5% level that several Russian economists have described as the minimum needed for stable economic development.