Pro-Kremlin Experts Predicted An Inevitable Recession Of The Russian Economy

It's coming in 2026.

Russia's economy will face a full-fledged recession as early as 2026, according to an analytical note published by the Center for Macroeconomic Analysis and Short-Term Forecasting (CMAKP), which close to the Kremlin, which as early as April noted the transition to recession in civilian industries, writes The Moscow Times.

The note, titled "What do leading indicators of systemic financial and macroeconomic risks show?" based on statistics available in July, estimates the return of the JII to the level of 0.1 in May, compared to 0.07 in April, with a critical level of 0.18 in April. In May, the value of SOI amounted to 0.1 against 0.07 in April at the critical level of 0.18, the economists note, emphasizing that further growth of SOI and "the breakdown of the critical level is inevitable."

CIACP highlights the following factors contributing to the growth of the SOI indicator, which will "beep" before the end of the current year: "compression of the balance" of the current account of the Russian balance of payments, increased probability of a scenario with a banking crisis in the Russian Federation, the continued high level of Russian money market rates, etc.

The note states that the transition to GDP decline will not stop even further reduction of the key rate of the Central Bank (it "will not stop the processes that have already begun"), which has reduced it twice this year (at the end of July - from 20% to 18%). The value of SOI will reach a critical level in October if the Central Bank keeps the key rate at the lower threshold of the forecast for 2025, and this will be a signal of recession from 2026, the analysts say.

The economists also analyzed another indicator (SOI of exit from recession), which, according to the analysis, has overcome its critical threshold: May was the second month in a row when it showed a value of 0.25 (minimum - 0.35). "If the values of this SOI remain below the critical threshold for more than twelve consecutive months, it may signal that the expected recession will be protracted, i.e. the reduction in the physical volume of GDP (for a rolling year) may last for more than four consecutive quarters," the CICAP explains.

In the opinion of Sofia Donets, chief economist at T-Investments, fears of an impending recession have grounds. She notes that the cooling of the economy is a highly inertial process, and reminds that in the first half of 2025, many sectors recorded stagnation, while economic activity remained at a plateau. Under these conditions, Donets notes, together with a simultaneous slowdown in investment, the stage is set for a further contraction in economic activity in the second half of the year and probably in early 2026.

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