How the Russian economy is faring amid military actions
According to the analytical center The Economist, the Russian economy, functioning in wartime conditions, shows no signs of resource depletion, although it faces new challenges. Official data from the Russian Federation recorded a GDP decline of 0.2% in the first quarter of 2026. However, from 2022 to 2025, real GDP per capita (adjusted for inflation) increased by 12%. Experts from The Economist believe that the weak official figures at the beginning of 2026 are merely a statistical illusion that does not reflect the real picture.
At the same time, the Kiel Institute for the World Economy claims that Russia is approaching structural depletion. Charles Hecker from RUSI suggests that the country is likely already in recession. Nigel Gould-Davies from IISS warns of an impending crisis in Russia's political economy. However, data from VEB Bank indicates an acceleration in GDP growth in March and April 2026. The GDP growth forecast for Russia in 2026 is approximately 1%.
Consumer confidence and military expenditures
Consumer confidence has declined but remains at levels close to historical highs. Many companies feel relatively stable, and the resilience of the economy is ensured through significant budgetary infusions. Military expenditures have increased by 3-4% of GDP compared to pre-war levels, with the Russian government spending 7-8% of GDP on the army. The budget deficit is around 3% of GDP. The unemployment rate remains at 2%, and inflation has halved from a recent peak exceeding 10%. Real wages are 25% higher than in 2019.
In the first five months of 2026, Aeroflot transported nearly ten percent more passengers than the previous year. Lamborghini car sales in 2026 increased by 80% compared to 2025. At the same time, intensified sanctions, falling oil prices, and strikes by Ukraine on oil infrastructure could significantly reduce GDP growth rates. Beginning January 2026, VAT was raised from 20 to 22%. Goldman Sachs estimates show sluggish growth without collapse; however, many experts doubt the sustainability of the Russian economy in light of current challenges.
"But who will stop them?" poses a rhetorical question from The Economist.
Thus, despite several positive signals, such as increased consumer activity and sales of premium cars, the situation in the Russian economy remains tense. Experts emphasize that prolonged sanctions and internal economic difficulties could hinder stable development in the future. Against the backdrop of rising military expenditures and structural problems, Russia faces risks that could significantly impact its economy in the coming years. It is important for the Russian-speaking audience to understand that current indicators may be temporary and do not reflect long-term trends, especially amidst ongoing geopolitical uncertainty.
Despite optimistic forecasts regarding GDP growth, a key question remains how the Russian economy copes with current challenges. While some experts argue that the country may slide into recession due to military actions and economic hardships, others point to stable indicators and potential opportunities for development. This creates a contrast in assessments and highlights the need for careful analysis of the situation.