FX.co ★ Russia GDP Grows 1% in 2025

In 2025, the Russian economy experienced a 1% growth in its gross domestic product, aligning roughly with market predictions and forecasts from the economy ministry. This growth surpassed the International Monetary Fund's (IMF) warning of a potential decline to 0.6%. However, this increase represents a notable deceleration from the previous year's 4.9% growth rate, falling short compared to other emerging markets. This deceleration can be attributed to the Kremlin's ongoing military expenditure due to the extended conflict in Ukraine, diverting funds from economic-stimulating investments. Additional economic pressures came from low crude oil prices, reduced natural gas exports resulting from European sanctions, restrained trade with China related to their anti-involution initiatives, and a strong ruble driven by significant interest rate hikes from the Bank of Russia. Meanwhile, the manufacturing sector saw a 3.9% increase in output, which helped mitigate a 1.7% decline in the extractive industries.