Russia's gross domestic product (GDP) grew by 1.1% in the second quarter of 2025 compared to the same period last year, the Federal State Statistics Service (Rosstat) reported on 13/8. This figure indicates a slowdown in the Russian economy. Growth in the first quarter was 1.4%, while in the fourth quarter of 2024, it was 4.5%.
According to Rosstat, several sectors saw growth in the second quarter, including manufacturing, construction, retail, agriculture, and public catering. Conversely, wholesale and mining declined.
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Inside a food market in Saint Petersburg, Russia. Photo: Reuters |
Inside a food market in Saint Petersburg, Russia. Photo: Reuters
Military spending helped Russia's economy return to growth after contracting in 2022 due to sanctions imposed following the conflict in Ukraine. According to Dmitry Medvedev, Deputy Chairman of the Security Council of Russia, the country is currently under about 30,000 sanctions from the West. Last year, the Russian economy grew by 4.1%.
However, this year, some officials have voiced concerns about the economy. At the St. Petersburg International Economic Forum in June, Russian Minister of Economic Development Maxim Reshetnikov stated that economic indicators suggest a stagnation trend. "Based on the actual feelings of businesses and the current indicators, I think we are on the verge of a recession," he said.
Increased defense spending has fueled inflation, which is currently around 9%. This has forced the Central Bank of Russia to raise interest rates. Last year, rates were raised to 21% and have been lowered to 18% since July. High interest rates put pressure on economic growth prospects.
The Central Bank of Russia predicts that GDP growth this year may only reach 1-2%. The Ministry of Economic Development also stated that it would adjust its current 2.5% forecast.
In late July, the International Monetary Fund (IMF) raised its growth forecast for emerging and developing economies from 3.7% to 4.1% for this year. However, they lowered their forecast for Russia from 1.5% to 0.9%.
Despite these figures, Russian President Vladimir Putin denied that the war is crippling the economy. He stated that low debt levels and economic diversity remain positive signs for the nation.
Ha Thu (via Reuters, TASS)
