The Russian Minister for Economic Development, Maxim Reshetnikov, stated on Friday that the government is preparing to revise down its official GDP growth forecast for 2026. The previous optimistic expectation of 1.3% is proving difficult to maintain due to the central bank's long-standing high interest rates aimed at combating inflation. Reshetnikov admitted that the first half of 2026 will be "extremely difficult," and the Ministry of Economic Development will take into account all current negative indicators in the latest forecasts to be released in April.
Policy Dilemmas and Exchange Rate Adjustments
Although Russia's economic growth plunged from 4.3% to 1% last year, Reshetnikov pointed out that even a reduction in interest rates by the central bank would hardly produce immediate stimulation for this year's economy. However, there is an "interesting divergence" in the macroeconomic data: due to a strong trade surplus and capital inflows, the ruble is expected to strengthen. This suggests that the Russian economy is in a peculiar balance of "high costs, slow growth, and a strong currency." Prior to the U.S.-Iran conflict causing fluctuations in energy prices, the low prices of Russian oil were a stumbling block to growth, and now, high borrowing costs have become a new structural constraint.
