BOFIT’s Forecast for Russia 2025–2027: GDP growth to slow sharply

Russian growth in recent years has been driven by surging government spending on the war in Ukraine. We expect government spending to increase further this year, but production is already stretched to capacity, limiting potential for further output gains. The country’s labour shortage has grown more acute, inflation is accelerating and sanctions are limiting Russia’s foreign trade. Although a full-blown economic crisis in the immediate future is unlikely, Russia’s economic development is subject to exceptionally high risks as long as it continues the prosecute its war in Ukraine.

”For the moment, Russia has sufficient economic resources to continue the war in Ukraine,” notes BOFIT senior economist Heli Simola. “That is Russia’s most important goal regardless of the suffering it causes or the costs, but the costs become continuously higher.”

The BOFIT forecast for Russia 2025-2027 will be released March 24 and available at: https://www.bofit.fi/en/forecasting/latest-forecast-for-russia/