FX.co ★ Russian GDP Growth Slows to 1.1% in Q2

Russia's GDP increased by 1.1% in the second quarter of 2025, a noticeable decline from the 4% growth recorded in the same period the previous year, according to preliminary estimates. While the economy experienced a surge last year due to a significant rise in defense spending, despite Western sanctions, it now confronts a slowdown in growth and an elevated risk of recession. The high interest rates, which were implemented to control persistent inflation, are causing a drag on economic activity. President Putin has dismissed assertions that the conflict in Ukraine is severely impacting the economy, emphasizing Russia's low debt levels and economic diversification. Following a growth rate of 4.3% in 2024, the central bank now anticipates a more modest expansion of 1–2% this year, and the economy ministry is considering revising its forecast of 2.5%.