**Russia’s Economy Slows Down: IMF Predicts Stagnation**
The International Monetary Fund (IMF) has released its latest global outlook, warning that Russia’s economy is set to sharply decelerate and return to stagnation after two years of war-driven expansion. According to the IMF, Russia’s economic growth will slow down in 2025, with projections cut from 4.3% in 2024 to just 0.9%. Growth is expected to remain sluggish at 1% in 2026.
**Falling Energy Revenues and Budget Pressures**
The main drivers behind the forecast downgrade are falling energy revenues, mounting budget pressures, and limits to further economic expansion under wartime conditions. The IMF estimates that Brent crude prices will decline by 13.9% this year to an average of $68.18 per barrel, which is lower than Russia’s federal budget had relied on.
**Impact on Energy Companies**
The warning comes as Russia’s largest liquefied natural gas producer, Novatek, reported a 34% drop in net profits in the first half of 2025. This highlights the broader impact of falling energy revenues on the Russian economy.
**Concerns from Top Officials**
This warning follows growing concern from Russia’s top economic officials. Central Bank Governor Elvira Nabiullina said in June that Russia’s war-fueled growth is “fading fast,” and that the economy has reached the limits of its capacity. Russian Economy Minister Maxim Reshetnikov also echoed concerns, saying that Russia is “on the verge of a transition to recession.” However, President Vladimir Putin dismissed these concerns, claiming that Russia’s economy remains strong despite sanctions and war.
**The Cost of Sustained Militarization**
The IMF’s findings reflect the cost of sustained militarization. Russia has raised defense spending to 6% of GDP in 2025 – the highest since the Cold War – while its civilian sectors suffer from labor and capital shortages. Economist Andrei Movchan, founder of Movchan’s Group, told the Kyiv Independent that the Kremlin’s heavy military outlays are choking broader economic performance.
**Russia Lags Behind**
The IMF’s report signals that the artificial growth Russia achieved through wartime stimulus and defense industry mobilization is unsustainable, and that the country is set to lag far behind both developed and developing economies in the years ahead.
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