Bank of Russia cuts 2025 GDP forecast to 0.5-1.0% and lowers key rate to 16.5%

Moscow — The Bank of Russia (Банк России) lowered its forecast for GDP growth in the Russian Federation in 2025 to 0.5-1.0% from 1.0-2.0% in the July version of the forecast, according to the medium-term outlook published after the board of directors meeting on October 24, 2025, at which the regulator cut the key rate to 16.5% from 17%.

The estimate for GDP dynamics in the fourth quarter of 2025 was also worsened, to a range of minus 0.5% to plus 0.5% year-on-year, compared with growth of 0-1.0% in the July version. At the same time, the forecasts were left unchanged from the July version for GDP growth in 2026 — an interval of 0.5-1.5%, in 2027 — 1.5-2.5%, and in 2028 — 1.5-2.5%.

The regulator's assessment of economic activity

"The upward deviation of the Russian economy from the balanced growth trajectory is decreasing. Operational data and survey indicators point to a slowdown in the growth of overall economic activity in the third quarter of 2025, which nevertheless remains positive," the Central Bank release said.

The regulator noted that business activity dynamics are uneven across sectors. A significant cooling is observed in industries oriented toward external demand, while domestic demand is supported by growth in household incomes and budget spending. Growth in consumer activity accelerated somewhat, the Bank of Russia added.

Shortly after the publication of the forecast, the Bank of Russia raised its estimate of the average key rate for 2026 to 13-15%.

Ministry figures and analyst expectations

Russian GDP growth in August 2025, according to the estimate of the Ministry of Economic Development (Минэкономразвития), was 0.4% year-on-year, following an increase of 0.4% in July, 1.0% in June, 0.7% in May, 1.5% in April, 1.1% in March, 0.5% in February and 2.7% in January. For January-August 2025, GDP added 1.0% year-on-year by the ministry's calculations.

• In September, the Ministry of Economic Development lowered its 2025 GDP growth forecast to 1.0% from 2.5% in the April version, and its 2026 forecast to 1.3% from 2.4%.
• Analysts polled by Interfax (Интерфакс) in early October expect Russian GDP to rise by 1.0% in 2025 and by 1.4% in 2026.
• The Bank of Russia's key rate was cut to 16.5% from 17% at the meeting of October 24, 2025.

The lowered forecast reflects the cooling of economic activity that the regulator has recorded since the middle of the year, against a background of a gradually easing monetary policy stance. More context on the Russian economy is available in the country profile Russia.

Source: Interfax — Bank of Russia lowered the 2025 GDP growth forecast to 0.5-1.0%.