The Bank of Finland’s BOFIT published its 2025–2027 forecast for the Russian economy, concluding that Russia’s latest episode of high economic growth has ended and that GDP growth in 2025 will remain at or below 1%, with growth of about 1% a year expected over the forecast period. The forecast attributes the slowdown to the needs of the war, labour shortages and slower growth in public spending, with falling oil prices also cutting government tax revenues in 2025. Public spending is expected to continue supporting domestic demand, particularly production in sectors linked to the war effort, while other parts of the economy face labour constraints and tightening borrowing conditions. BOFIT flags increasing downside risks as macroeconomic imbalances worsen, and notes that while a longer pause in military activity would ease pressures, the military-industrial complex is unlikely to diminish soon; it nevertheless assesses that Russia can sustain the war at current levels and maintain sufficient living standards for most of the population.
Bank of Finland 2025-10-20
Bank of Finland BOFIT forecasts Russian GDP growth to stay around 1% in 2025–2027 as war-related constraints intensify
BOFIT's 2025–2027 forecast for Russia predicts GDP growth at or below 1% due to war-related needs, labor shortages, and reduced public spending growth. Falling oil prices are expected to decrease tax revenues, while public spending will support domestic demand, especially in war-linked sectors. BOFIT highlights increasing downside risks from macroeconomic imbalances but notes Russia can sustain current military levels and maintain living standards.