Russia’s economy may slide into recession before the end of the year. A report by the CMASF (a center close to the Kremlin) shows that GDP growth slowed to 1% last year, a nearly fivefold drop from 2024’s 4.9%. The Composite Leading Indicator (CLI) hit 0.49 in December, three times the critical threshold, signaling a potential prolonged recession. Economists cite high interest rates, labor shortages, and an investment hiatus as primary drags. While high oil prices provide a temporary buffer, any price drop or new sanctions could trigger a definitive downturn.
Analytical summary: This forecast from a Kremlin-affiliated body effectively admits that the resources of “military Keynesianism” are depleted. The economy is overheated, and prohibitive central bank rates have paralyzed private investment. Russia’s state-driven growth model has hit a ceiling: without access to foreign capital and technology, Russia cannot sustain even minimal growth. Moscow’s strategy now relies solely on external shocks and energy market volatility, as domestic drivers are stifled by inflation and labor deficits.