Putin's war economy will face problems in 2025 - Bloomberg
President Vladimir Putin's invasion of Ukraine sparked economic growth in Russia, based on government stimulus. Almost three years later, there are signs that it is time to pay the bills.
This is reported by RBC-Ukraine with reference to Bloomberg.
As noted in the publication, the combination of record high interest rates and persistent inflation is increasingly jeopardizing forecasts for 2025.
“The relatively good period for the Russian economy, which was based on previously accumulated resources, is over,” said Oleg Vyugin, an economist and former senior Central Bank official. According to him, high inflation is eating up all this short-term growth.
On top of that, Russia is facing sanctions, a recent currency depreciation, an unclear outlook for oil prices, and the prospect that its largest trading partner, China, will not be able to shake off serious economic problems on its own.
The central bank predicts a sharp decline in growth in 2025 to 0.5%, down from the projected 3.5-4% last year, and inflation will return to the 4% target only in 2026.
While the Economy Ministry's forecast is rosier, with growth of 2.5% this year, Vladimir Putin said last month that the economic cooling is part of the government's plan to “stabilize” inflation.
Author - Dmitriy Levchenko, 08/01/2025
