Russia's Central Bank Slashes Economic Growth Forecast

Russia's central bank has significantly revised down its economic growth forecast for the current year. The new projection places growth between 0.0 and 1.0 percent, a notable decrease from the previously anticipated 0.5 to 1.5 percent.

This downward adjustment comes despite a moderate pace of GDP growth observed in the second quarter, which was largely sustained by consumer demand. While investment activity showed some recovery, it remained generally restrained, according to the central bank's assessment.

The bank highlighted that since June, the impact of declining production volumes has become more pronounced in specific sectors. Furthermore, businesses' expectations regarding future demand have fallen compared to the previous month, signaling a more cautious economic outlook.

Labor market conditions have seen some easing, with recruitment levels rising. Wage growth has slowed but continues to outpace productivity gains. The unemployment rate remains at a record low, according to the central bank's data. The Ministry of Economic Development offers a slightly more optimistic forecast of 0.4 percent growth for the year, but its projection for 2027 falls below the central bank's.