Will Russia enter a formal economic recession in 2026?

New research from the Institute of Economic Forecasting of the RAS signals a sharp deterioration in Russia’s economic conditions. Investment bank lending has nearly disappeared, consumer spending fell 3% year-on-year, and business investment has slowed markedly under the weight of high interest rates and rising taxes. Access to long-term investment credit has dropped to levels last seen in the early 2000s—worse than during the 2008 crisis or the COVID-19 shock. Analysts argue that prolonged tight monetary policy by the Central Bank of Russia, combined with sanctions, has exhausted much of the economy’s adaptation capacity. Surveys show record-high complaints from firms about weak demand, while GDP growth in 2025 undershot official forecasts.