Russia's growth forecast for this year has been lowered to 0,5-0,7%, according to a report by the Center for Macroeconomic Analysis and Short-Term Forecasting (TsMAKP), a Russia-based research center. This rate marks a decrease from the 0,9-1,3% forecast issued a month prior.

TsMAKP explained that high oil prices will not significantly support Russia's economic growth. This is due to Ukrainian drone attacks and new Western sanctions that are pressuring the country's crude oil production and exports.

"Forecasts for Russia's oil and oil product exports for the 2026-2029 period have been revised downwards. This year, exports are projected to be lower than in 2025", TsMAKP analysts stated in the report, without providing specific figures.

Inside a food market in Saint Petersburg, Russia. Photo: Reuters

Last month, Russia was forced to cut oil production following Ukrainian drone attacks on its seaports and oil refineries. It also had to halt crude oil supplies through its sole pipeline to Europe.

Previously, many organizations had forecast Russia to be a primary beneficiary of surging oil prices, driven by conflicts in the Middle East and a potential blockade of the Strait of Hormuz. Moscow is currently one of the world's leading oil producers. Brent crude has risen nearly 60% over the past two months.

"When updating the external context for the baseline scenario of socio-economic growth, the main factor considered is the risk of declining Russian oil production and exports, due to new attacks targeting port infrastructure and oil refineries", the report stated.

The Russian government's official forecast is for economic growth of 1,3% this year. However, officials also indicated this figure is optimistic and will be revised. A new forecast may be released by the end of this month.

In Quarter I, Russia's GDP decreased by 0,3%, marking the first economic decline since early 2023. Last month, Russian President Vladimir Putin reprimanded senior officials, demanding new ideas to boost growth.

Nevertheless, Russian Finance Minister Anton Siluanov stated last week that the state budget gained an additional 200 billion ruble due to high oil prices. This amount partially offset the budget deficit from the preceding two months.

By Ha Thu (according to Reuters, Interfax)