**Russia’s Economy Slows Down Sharply**
The Russian economy is experiencing a significant slowdown in growth, according to the latest data from the government’s statistics agency, Rosstat. In the first quarter of 2025, the Gross Domestic Product (GDP) grew by only 1.4%, which is a decline from the 4.5% growth seen in the previous quarter and the 5.4% growth recorded in the same period last year.
This slowdown has caught many analysts off guard, as they had predicted higher growth rates for the economy. The Russian Economic Development Ministry estimated GDP growth at 1.7%, while Bloomberg analysts predicted 1.8% growth. However, Rosstat’s data shows a more modest increase, which is concerning for the country’s economic outlook.
**Experts Point to Multiple Factors**
According to Egor Susin, an executive from Gazprombank, the economy’s slowdown can be attributed to several factors, including Central Bank policies, sanctions, supply difficulties, and high inflation. Additionally, Raiffeisenbank analysts note that low oil prices are also contributing to the economic strain on Russia. The bank reported a 10% decline in oil and gas revenues from January to April.
**War with Ukraine and Sanctions Take Their Toll**
The report from the Stockholm Institute of Transition Economics (SITE) highlights the significant impact of the war with Ukraine and Western sanctions on Russia’s economy. Despite claims from the Kremlin that the economy is stable, SITE reveals that the situation is far more complicated. The institute’s analysis suggests that military spending is putting a strain on the economy, and if peace talks fail, additional sanctions could exacerbate the economic downturn.
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