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The Russian economy is cooling faster than the government had previously expected. Russia's GDP growth in 2025 may reach 1.2%, which is more than half the official April forecast of 2.5%. This was reported by the Russian Interfax news agency, citing an informed source.

"The cooling continues, the economy is slowing down faster than expected. If earlier we expected a growth rate of 1.5%, now it is already 1.2%," the source said.

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Due to lower GDP growth expectations, the base for budget revenues will also shrink, which in turn may require mobilization of resources, he added.

"Accordingly, the resource base is also shrinking, so we will mobilize resources this year and, accordingly, prepare the budget for the next year based on this," the source explained.

Last week, Finance Minister Anton Siluanov announced that the Russian economy will grow by at least 1.5% this year, according to the Ministry of Economic Development.

Thus, the Ministry's official forecast was lowered by 1.3 percentage points from 2.5%, which is near the lower end of the Central Bank's range of 1-2%.

  • Russia's budget deficit for seven months of 2025 reached 4.88 trillion rubles ($61.44 billion)or 2.2% of GDP. This is a quarter higher than the deficit for the entire current year of RUB 3.7 trillion, or 1.7% of GDP, envisaged in the budget law.
  • In 2025, Russia plans to spend 17 trillion rubles on defense and security, which is 41% of total expenditures and the highest level since the Cold War. To maintain record high defense spending, the Russian Federation preparing to raise taxes and cut civilian spending.