IMF downgrades forecast for Russia’s economy for the third time in a year
In its January update of the World Economic Outlook, the International Monetary Fund has, for the third time over the past year, lowered its expectations for the growth rate of Russia’s GDP in 2026.
According to the new figures, Russia’s economy is expected to grow by just 0.8%, which is 0.2 percentage points lower than the October forecast and significantly below the levels Russia recorded in previous years, largely driven by military production.
This slowdown means that in 2026 Russia’s economy will grow four times more slowly than the global average (+3.3%) and eight times more slowly than India’s (+6.2%). IMF projections show that Russia will lag well behind the United States (+2.1%), China (+4.2%) and the average for emerging economies (+4%). Among the world’s largest economies, only Japan is expected to perform worse than Russia, with growth forecast at around 0.6–0.7%.
Experts cite several key reasons for this negative trend, including the exhaustion of resources for further expansion of military production, labour shortages caused by mobilisation, and the tight monetary policy of the Russian central bank, which is maintaining high interest rates to combat inflation. In addition, budget revenues are under pressure from sanctions and falling energy prices, forcing Russia to raise taxes to finance its war expenditure.
Meanwhile, since the end of 2024, Russia’s annual economic growth has fallen from around 5% to close to zero. Analysts attribute this to inflation, military investment and declining oil prices amid tariffs introduced by Trump.
After three years of unexpected economic growth, Russia is now facing a sudden slowdown: war spending, inflation and falling oil prices have begun to weigh on an economy that until recently appeared resilient to sanctions.
