Russia Adjusts Economic Growth Projections Amid Global Oil Price Surge
Russia has lowered its GDP growth forecasts for upcoming years, while maintaining a budget oil price projection despite global price spikes. Deputy PM Alexander Novak attributes the slowdown to cyclical corrections post robust growth fueled by military spending. The Russian economy faces unprecedented sanctions pressure.
MOSCOW, May 12 - Russia's economic outlook faced revisions as the government cut the GDP growth forecast for 2026 and subsequent years, holding steady on oil price projections despite global fluctuations. The latest estimates, revealed by Deputy Prime Minister Alexander Novak in an interview with Vedomosti, indicate a reduced GDP increase to 0.4% in 2026 from the previous 1.3%.
Novak pointed to a natural cyclical correction following the high growth period of 2023-24, primarily driven by military expenditures related to the Ukraine conflict, as the cause of the downturn. Despite the economic pressures from Western sanctions, tax increases, and discounted oil prices due to sanctions, the government maintains a conservative fiscal policy.
The decision to keep the budget oil price at $59 per barrel reflects a steadiness in policy amidst potential market benefits from geopolitical tensions, though this is not seen as a long-term gain. The Russian leadership is urged by President Putin to rejuvenate growth by 2026, aligning with national development goals.
(With inputs from agencies.)
Google News