The Russian GDP expanded by 1% in real terms from the previous year in the fourth quarter of 2025, picking up from the 0.8% expansion in the previous quarter, which was the slowest growth rate since 2023. The figure confirmed that Russia’s economy significantly underperformed other emerging markets as the Kremlin’s prolonged invasion of Ukraine allocated government spending in the military instead of investments that stimulate the economy. Low crude oil prices, softening natural gas exports due to European sanctions, muted trade with China due to their anti-involution campaign, and a strong ruble amid soaring interest rates by the Bank of Russia also pressured the Russian economy.

Russia Inflation Holds at 5.9% in March

Russia’s headline annual inflation rate remained unchanged at 5.9% in March 2026 compared to February, slightly above forecasts of 5.8%. The strongest price increases were recorded in services at 10% and food products at 5%. Within food, fruit and vegetable products led gains at 7.4%. Amid Middle East oil supply concerns, gasoline prices rose 2.3%. Housing prices increased 2.2% and utilities 5.1%, with gas supply up 2.1%. On a monthly basis, the Russian CPI rose 0.6% following a 0.7% increase in February.

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