The Russian economy in free fall due to sanctions and oil prices

Due to sanctions and falling oil prices, the Russian economy has begun a gradual transition from stagnation to recession

The economic situation in Russia has significantly deteriorated since 2025. GDP growth rates are declining, inflation is rising, and the budget deficit is widening. After stagnating for the first three years of the war, the Russian economy has started to show signs of recession. The stagnation in production and trade is gradually turning into decline.

Clearly negative trends are now recognised not only by international experts but also confirmed by reports from Russian economic experts.

According to the Russian Centre for Macroeconomic Analysis in a report from the first quarter of 2025: "The industry is stagnating. After an increase at the end of 2024, industrial production sharply fell in January to mid-2023 levels and then stabilised. When considering the dynamics of industrial production excluding sectors of the military-industrial complex, one can speak of a transition to recession."

(MH with FM - Source: Moscow Times - Photo: © Unsplash)