Russia expects economic recovery to be delayed until 2027

Partial shift of value-added tax and food inflation to January to delay monetary policy impact, says Russian economic development minister

By Emre Gurkan Abay

MOSCOW/ISTANBUL (AA) — Russia said on Thursday that Moscow expects the economic slowdown to continue in the first half of the year, with a recovery not expected until 2027.

Russian Economic Development Minister Maxim Reshetnikov said Moscow and the central bank worked together to control and slow inflation by the end of 2025. However, there have been some increases due to a partial shift in value-added tax (VAT) and food inflation in January of this year.

Reshetnikov, speaking in the State Duma, or lower house of parliament, said the country's inflation is expected to slow after January and move closer to the 4% target, while monetary policy decisions will take six to nine months to take effect.

The ministry, according to previous forecasts, expected the economy to recover in the second half of the year.

Russia's Central Bank estimates that the country's economy will grow by 0.5-1.5% in 2026.

The Russian economy has entered a cooling period, having grown 4.1% in 2023 and 4.9% in 2024, but only 1% last year.⁠

*Writing by Emir Yildirim in Istanbul

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