The International Monetary Fund (IMF) has downgraded Russia’s gross domestic product (GDP) growth forecast for 2025 to 0.6%, down from 0.9%, and below the official government forecast of 1%. Russia’s economy, heavily sanctioned by the West, is expected to slow sharply from 4.3% growth in 2024, primarily due to the high key interest rate maintained by the central bank to combat inflation. The key rate currently stands at 17%, with some business leaders suggesting that a rate between 12% and 14% is needed to reignite economic growth. Preliminary data released in August showed that Russia’s economy grew by 1.1% in Q2 2025, a sharp slowdown from the 4% in the same period a year earlier.
