According to the Russian Ministry of Economic Development, GDP in the third quarter increased by only 0.6% over the same period, significantly lower than the 1.1% in the second quarter and 1.4% in the first quarter. In the fourth quarter of 2024, growth reached 4.5%, creating a "high bottom effect" causing the growth rate this year to decline sharply.
The Russian central bank said GDP in the fourth quarter of 2025 could fluctuate between a 0.5% decrease and a 0.5% increase, instead of the 0-1% level forecast in July. If it falls, it will be the first quarter that Russia has recorded negative annual GDP since the beginning of 2023, when the economy contracted 1.6%.
"The Russian economy is not only stagnant, but is in a state of stagnation," said Anton Tabakh, chief economist at Expert RA.
According to the Russian Central Bank, signs of excessive heat are gradually cooling down, but inflation is still above 4% and the tense labor market shows that the pressure will last until at least the first half of 2026.
Therefore, high interest rates - currently among the highest in Europe - will be maintained for a long time, despite sharply increasing business capital costs.
The performance of Russian economic sectors is deeply differentiated. Mining and smelting - the main export group - is reducing output. Industries serving the domestic market grew slowly and unevenly.
The defense industry remains the main driver, while much of the civil sector is in decline.
According to data from the Center for Economic Analysis and Short-term Forecasting (CMASF), civil production has decreased steadily since the beginning of the year, with output falling by 73% out of a total of 129 key product groups.
The financial situation of the enterprise also deteriorated rapidly. The rate of companies at risk of losing liquidity could increase to 32.5% of industrial revenue next year, compared to 23.7% today.
Promsvyazbank warned of the risk of "excessive cooling down" as the economy only grows below the potential threshold of 1.5-2.5%/year.
Despite a slight improvement in September (GDP increased by 0.9% after 0.4% in August), analysts said this was just a "technical leap" from industries that have been stagnant for a long time.
Russia's GDP could fall by 0.7% in the fourth quarter of 2025, suggesting a reversal in both industrial and service weakness.
