After two years of rapid growth linked to the war, Russia's economy is now in recession, reports RBC, citing Andrei Klepach, chief economist at state bank BEB. The second quarter saw GDP decline by 0.6% compared with the first, following a similar drop in the first quarter, marking a "technical recession".
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Annual growth has slowed sharply, falling from 4.5% in the fourth quarter of 2024 to 1.1% in the second quarter of 2025. In July, GDP compared with the previous year dropped by 0.4%, with industrial output contributing only 0.7% growth. Key sectors intended for import substitution, including clothing, furniture, and electrical equipment, declined by up to 12%, while metallurgy fell 10.2%.
Analysts differ on whether a technical recession has begun, but there is broad agreement that the economy is "balancing on the edge of recession". High military spending, sanctions, low oil prices, and property rights concerns are exacerbating economic pressures. The IMF forecasts 0.9% growth for 2025, suggesting a period of stagnation for the Kremlin amid declining budget revenues.
Source: www.fakti.bg
