Published by Global Banking & Finance Review®
Posted on August 13, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleRussia's GDP growth slowed to 1.1% in Q2 2025, with inflation and interest rates posing challenges. IMF forecasts 0.9% growth for the year.
(Reuters) -Russia's gross domestic product grew by 1.1% in the second quarter of 2025 compared with 4.0% growth in the same period last year, federal statistics service Rosstat said on Wednesday, another sign that Russia's economy is slowing.
Soaring defence spending saw Russia's economy rebound from contraction in 2022 as Western sanctions over the war in Ukraine took their toll, but this year officials have warned of recession risks as the economy cools.
Elevated interest rates for several months, as the central bank seeks to reduce stubbornly high inflation, have hampered Russia's economic growth prospects.
President Vladimir Putin has dismissed claims that the war in Ukraine is devastating Russia's economy, citing low debt and economic diversification as signs of resilience.
After GDP growth of 4.3% last year, the central bank forecasts a 1-2% rise this year, while the economy ministry has said it will tweak its current 2.5% forecast.
In late July, the International Monetary Fund raised its outlook for economic growth across emerging market and developing economies this year to 4.1% from 3.7%, driven by frontloading and a more upbeat view on China, but Russia was one of the few exceptions.
According to the IMF, Russia's economy is now expected to expand by 0.9% this year, compared with its previous view of 1.5% growth.
(Reporting by Darya Korsunskaya; writing by Alexander Marrow; editing by Mark Heinrich)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI).
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by central bank policies and economic conditions.
A recession is a significant decline in economic activity across the economy, lasting longer than a few months, typically visible in GDP, income, employment, manufacturing, and retail sales.
The International Monetary Fund (IMF) is an international organization that aims to promote global economic stability and growth by providing financial assistance, policy advice, and technical assistance to member countries.
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