The Bank of Finland’s latest BOFIT forecast projects that Russian economic growth will slow further, with annual gross domestic product growth of around 0.5% in both 2027 and 2028. Rising war related government spending will support activity, but supply constraints and economic imbalances will limit growth as consumption weakens and investment contracts. The budget deficit is expected to persist and become harder to finance, while the conflict between expansionary fiscal policy and monetary policy will pose increasingly difficult choices. A near term economic crisis remains unlikely, and Russia is expected to maintain current production and raise enough financing to continue the war. However, weaker economic performance has increased vulnerability to shocks, including changes in the war, oil revenue fluctuations and an ineffective balance between monetary and fiscal policy, any of which could push the economy into recession.
Bank of Finland forecasts Russian GDP growth slowing to around 0.5% in 2027 and 2028
The Bank of Finland forecasts Russian GDP growth of around 0.5% in both 2027 and 2028 as weaker consumption, contracting investment and supply constraints offset higher war related spending. A near term crisis is unlikely, but persistent deficits, financing pressures and exposure to war, oil revenue and policy shocks create substantial recession risks.