Page 24 - bne IntelliNews Russia OUTLOOK 2025

“We believe this disconnect is largely subjective, reflecting essential features of three main groups of analysts.
“The first group consists of long-time Russia specialists who view current events through a Soviet-era lens, interpreting Putin’s dictatorship as an attempt to restore the Soviet system.
“The second group includes analysts who work for Western governments or NGOs, and feel compelled to propose sanctions and restrictions, projecting confidence in their effectiveness.
“The third group is made up of experts with Russian backgrounds, including those former politicians who despise Putin and are convinced of his regime’s imminent collapse.
“The deep bias of these groups hinders objective assessments of the Russian economy’s current state and prospects,” three of Russia’s leading economists opine.
Stagflation
The Central Bank published a report in November analysing financial flows and found that Russia is on the verge of an economic slowdown.
In October, the volume of incoming payments via the Central Bank’s payment system (about half of all payments made in Russia) was down 2.9% compared with the third quarter average.
This sort of decline was visible in all industries the Central Bank studied. The only exception was the consumer market, where payment volume growth continued (albeit at a slower rate than before).
Data from the State Statistics Service on industrial output in Russia from January to September (the most recent data) painted a similar picture.
“The slowdown is not simply due to declining output in the raw material extraction industries (this has been ongoing for several months amid falling export prices), but also a stuttering manufacturing sector. The only place growth is still noticeable is in sectors linked to the military. Everywhere else in the economy growth is absent, or, at best anaemic,” The Bell said in a note.
Economists revised downward their projections for Russian GDP growth. Predicted growth for 2025 is now about half the global level and will slow to somewhere between 0.5% and 1.5%. In 2026, it’s expected to be below 2%.
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