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Russia’s Economic Engine Stalls: Central Bank Predicts Near-Zero Growth
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![Photo of Roman Kohanets]( "Photo of Roman Kohanets")
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The Central Bank of Russia has sharply downgraded its economic outlook, predicting that the country may see zero GDP growth by the end of 2025, according to an August 6 report by The Moscow Times.
Citing internal forecasts, the Central Bank’s August bulletin warns of deteriorating business activity across multiple sectors, including construction, trade, and manufacturing. “We have revised the baseline scenario and now estimate that GDP growth may be close to zero by year-end,” the bulletin stated.
The latest assessment reflects growing concern over the cumulative effect of international sanctions, falling energy revenues, and restricted access to foreign technologies and capital.
The Bank’s economists attribute the slowdown primarily to weakened domestic demand and declining exports, noting that “the economic momentum observed in the first half of 2025 has nearly stalled.”
This comes amid a broader economic contraction. Oil and gas revenues, a key component of the federal budget, dropped nearly 30% year-on-year in July 2025, as previously reported by The Moscow Times on August 5. The Central Bank’s report adds that inflationary pressures are also returning, with consumer prices rising faster than previously projected.
Earlier, it was reported that Russia’s economy is expected to grow only 0.9% in 2025 and 1.0% in 2026, according to the IMF.
This marks a dramatic decline from the 4.1% growth in 2024, with analysts citing sanctions, shrinking exports, and reduced productivity as key factors behind the downturn.
