Russia’s wartime economy, which saw rapid growth driven by military production, has passed its peak, according to analysts. While defense-related manufacturing continues to expand to support the ongoing war in Ukraine, it’s no longer sufficient to offset declines in other sectors. Economists, including Oleg Kuzmin of Renaissance Capital, are uncertain whether the economy will experience a “soft” or “hard” landing in the coming year.
Military production fueled significant growth in 2023, pushing the economy to expand by 3.6%, but now broader economic indicators suggest a slowdown. The Bank of Finland and Bloomberg Economics expect growth to decelerate, forecasting Russia’s economy will grow by around 1%-2% in 2025, down from the 3.5% average of the past two years. Civilian-driven sectors like construction and transport are stagnating due to high mortgage rates and capacity constraints, with the central bank warning that Russia’s economy is nearing its full production potential.
Despite forecasts of 3.5%-4% growth for 2024, Russia faces significant challenges. Crisis-level interest rates could reach 20%, raising inflation and economic pressure on consumers. In the longer term, the outlook for the economy is bleak, as investment is expected to remain focused on the military-industrial sector, with little left for civilian industries. Experts suggest that Russia’s growth prospects, already poor before the Ukraine invasion, now look even worse.
Happy days.
Would hope so, but I’ve been reading Russia economic collapse articles for a couple of years now. Always “right about to happen”
Please be true. Russia can’t get away with their evil aggression in Ukraine.
That sounds great. 2025 is on the up already👍
How does that graph show what the title says? Industrial Production looks flat if not growing slightly
6 comments
Summary:
Russia’s wartime economy, which saw rapid growth driven by military production, has passed its peak, according to analysts. While defense-related manufacturing continues to expand to support the ongoing war in Ukraine, it’s no longer sufficient to offset declines in other sectors. Economists, including Oleg Kuzmin of Renaissance Capital, are uncertain whether the economy will experience a “soft” or “hard” landing in the coming year.
Military production fueled significant growth in 2023, pushing the economy to expand by 3.6%, but now broader economic indicators suggest a slowdown. The Bank of Finland and Bloomberg Economics expect growth to decelerate, forecasting Russia’s economy will grow by around 1%-2% in 2025, down from the 3.5% average of the past two years. Civilian-driven sectors like construction and transport are stagnating due to high mortgage rates and capacity constraints, with the central bank warning that Russia’s economy is nearing its full production potential.
Despite forecasts of 3.5%-4% growth for 2024, Russia faces significant challenges. Crisis-level interest rates could reach 20%, raising inflation and economic pressure on consumers. In the longer term, the outlook for the economy is bleak, as investment is expected to remain focused on the military-industrial sector, with little left for civilian industries. Experts suggest that Russia’s growth prospects, already poor before the Ukraine invasion, now look even worse.
Happy days.
Would hope so, but I’ve been reading Russia economic collapse articles for a couple of years now. Always “right about to happen”
Please be true. Russia can’t get away with their evil aggression in Ukraine.
That sounds great. 2025 is on the up already👍
How does that graph show what the title says? Industrial Production looks flat if not growing slightly
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