BOFIT Forecast for Russia 2026–2028 / 2

Amidst struggles with structural constraints and rising imbalances, the Russian economy has seen its growth stagnate at around 1 percent this year and is on track to slow further to around ½ percent next year. Increased government expenditure, which is crucial to sustaining Russia’s war of aggression on Ukraine, should be sufficient to maintain a very modest level of output growth. High global oil prices have helped ease Russia’s fiscal distress, but the government continues running budget deficits in coming years. Financing the budget deficit has become more difficult, but Russia is still able to sustain the financing and production required for its war of aggression. Balancing continued growth in government spending with efforts to curb inflation is becoming increasingly difficult, and the risk of a weaker-than-forecast economic performance is high.

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For further information

Senior Economist Heli Simola
tel. +358 9 183 2263, heli.simola(at)bof.fi

Head of Research Iikka Korhonen
tel. +358 9 2272, iikka.korhonen(at)bof.fi