Speaking at the State Duma in Moscow, Reshetnikov said that inflation has begun to slow toward the end of 2025 thanks to coordinated actions by the government and the Central Bank. He noted that a temporary uptick at the start of the year was caused by part of the increases in Value Added Tax (VAT) and food prices being shifted into January. Going forward, he said, they expect inflation to re-enter a downward trend and move closer to the 4% target.
Monetary policy impact felt with a lag
Recalling that monetary policy decisions affect the economy with a delay of six to nine months, Reshetnikov stated that they therefore expect the slowdown in economic activity to continue into the first half of 2026.
He added that a recovery in growth could begin as early as late 2026, but is more likely to materialize in 2027. In the ministry’s previous projections, the recovery had been expected in the second half of this year.
Limited growth forecasts
The Central Bank of Russia forecasts economic growth of between 0.5% and 1.5% for 2026.
The Russian economy grew by 4.1% in 2023 and 4.9% in 2024. However, a marked cooling occurred last year, with growth slowing to around 1%.
The latest statements indicate that the high interest rate environment and anti-inflation policies continue to weigh on economic activity, suggesting that a strong recovery in the Russian economy will take time.
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