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Russian Minister Tells Putin Russia Is Growing Faster Than the US, but the Numbers Tell Another Story
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Russia’s economy has outpaced the United States in terms of growth dynamics, Economy Development Minister Maksim Reshetnikov told Russian leader Vladimir Putin during a meeting on May 13.
Presenting data, Reshetnikov said Russia’s economy had demonstrated resilience despite sanctions and external pressure, The Moscow Times reported.
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“Despite all these external challenges, sanctions pressure, our economy has performed quite decently,” he said.
According to Reshetnikov, Russia’s per capita GDP has significantly closed the gap with the United States over the past decade. “If in 2017 our per capita GDP was 43% of the American level, then by the end of 2025 it is already almost 56%,” he stated, adding that Russia had been narrowing the gap while some European economies were falling further behind.
However, international data paints a more cautious picture of Russia’s relative economic standing. According to the International Monetary Fund, Russia ranks 66th globally in GDP per capita in 2026, with an estimated $18,530—between Trinidad and Tobago and Seychelles.
As reported by The Moscow Times, on this indicator, widely used to assess living standards, Russia trails countries such as Panama ($20,560) and Costa Rica ($20,300), and remains roughly 3.5 times below the average level of developed economies ($66,180). It also lags significantly behind the United States ($94,430), by about five times, and Germany ($65,300), by roughly 3.6 times.
Reshetnikov said Russia’s economy had grown by 10% over the past three years, while real disposable incomes increased by 26%. However, he noted that the economy had entered a “phase of stabilization and structural adjustment,” adding that early-year data indicated slowing momentum.
He acknowledged that the first quarter of the year marked the first contraction since 2023, and although March saw a return to growth following declines in January and February, it was “premature to speak about a restored growth trajectory,” The Moscow Times reported.
Meanwhile, Russia’s Ministry of Economic Development has sharply downgraded its forecasts for the current year and the medium term. The ministry now expects GDP growth of just 0.4%, down from a previous projection of 1.3%, and warns of a second consecutive year of declining investment, alongside a slowdown in real income growth to 1%.
In a conservative scenario that assumes a global economic slowdown and oil prices falling to $50 per barrel, the ministry projects Russia’s GDP could decline by 0.5%, with industrial output falling by 1% and retail turnover slipping by 0.4%.
Alongside official projections, alternative indicators point to growing structural stress in the economy. According to The Moscow Times, citing Rosstat data from April 21, overdue intercompany debts reached approximately $109 billion by the end of January, rising 21% year-on-year and setting a nominal record.
The payment backlog now amounts to about 3.8% of Russia’s GDP—equivalent to roughly one-fifth of the federal budget or around 15 times the annual budget of affluent regions such as Krasnodar Krai.
Manufacturing and trade account for the largest share of defaults. In manufacturing alone, overdue debt increased by $13.3 billion in 2025, reaching approximately $39 billion.
Within industry, the heaviest burden is concentrated in the energy and metals sectors. Oil producers are facing unpaid obligations of around $21.5 billion, while arrears among aluminum producers have nearly doubled to about $4 billion. Transport and machinery manufacturers also recorded a further $2.3 billion increase in unpaid debts, underscoring widening pressure across key industrial segments.
Recently, it was reported that Russia is planning to implement a new windfall tax on major corporations. This move is intended to mitigate the increasing economic pressure resulting from its ongoing war in Ukraine.
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