For the first time since the full-scale war against Ukraine began, the Russian economy has officially been recognized by the Kremlin as having lost momentum and entered a state of stagnation. GDP decline appears sharp and relentless: after 4.5% growth in Q4 2024, the figures fell to 1.4% in Q1 2025, 1.1% in Q2, and only 0.6% in Q3. This sudden slowdown demonstrates a systemic crisis that the authorities attempt to mask with euphemisms such as “planned cooling” or “reducing overheating.”
The rhetoric of government officials and the central bank cannot conceal the obvious deficit in both the federal budget and regional budgets. This is just the beginning of a long period of losses, which Moscow itself acknowledges: Russians will have to “tighten their belts” at least until 2042.
At this time, the country is effectively condemned to a persistent budget deficit. A key factor will be the decline in oil and gas revenues, which are projected to fall by 43% compared to 2019 levels. This trajectory indicates not temporary difficulties, but a deep and prolonged economic degradation. Russia is entering a decade in which recovery seems unlikely and financial losses appear inevitable.
