What awaits Russia’s economy next year? | economy

Al Jazeera Net correspondents

Moscow The Russian economy witnessed a slowdown in the last quarter of this year, without entering a state recessionwith slow growth recorded forGDP Annually, it ranges between 0.5% and 2.5%, according to official data. This slowdown is due to a rise in… interest rate Mainly, tightening monetary conditions and a decline in investment activity as a result of sanctions, the war in Ukraine, and structural problems, despite the high levels of government agreement to support the economy.

Although Penalties The West did not affect all sectors of the Russian economy, but it affected major sectors, including finance, energy, and the military, in addition to access to technology and the US dollar. While the transportation sector, especially aviation, has incurred significant losses due to the restrictions, other sectors are recording remarkable growth.

The financial sector was the most prominent affected sector, with restrictions imposed on access to the dollar and foreign financial systems, and the matter extended to energy exports and related technologies, as well as the military sector, which was subject to a ban on the import and export of weapons and their components. The use, maintenance and insurance of foreign aircraft was also banned, and foreign airlines withdrew from the Russian market. In addition, restrictions were imposed on access to advanced technologies, components and software.

Many Western companies have left the Russian market, and some have been expropriated by the Russian government, making the country less attractive to foreign investors in the long term. On the other hand, despite the sanctions, some sectors of the Russian economy continue to grow, led by agriculture and the services sector.

Confused market

The Federal Statistics Service indicated that Russian GDP growth in the third quarter amounted to 0.6% on an annual basis, and 1% for the period from January to September. Deputy Prime Minister Alexander Novak previously confirmed these numbers last October, and they were also contained in the Ministry of Economic Development’s basic forecasts for September.

In the same direction, the Ministry of Economic Development’s forecasts for the year 2026 were reduced from 2.4% to 1.3%, and the European Commission modified its forecasts for the Russian gross domestic product for the current and next years from 1.7% to 0.8% and from 1.2% to 1.1%, respectively.

These numbers highlight a clear trend since the beginning of the year, which is the continued slowdown of the economy, which raises questions about the stage this slowdown may reach in 2026, and whether it will actually fall below zero.

Difficult years

Andrei Zaitsev, a researcher in economic affairs, believes that the impact of the sanctions has become clearly tangible, especially in the last quarter of this year, causing an economic slowdown that includes all sectors, from small companies to large industries such as manufacturing, metals, oil and gas.

Speaking to Al Jazeera Net, Zaitsev explains that large companies have begun to turn to a four-day work week and part-time work system, as a result of the rise in the main interest rate, the decline in profitability, and the weak effectiveness of financial management.

He warns that the continuation of layoffs may leave tens of thousands of people without work, as it may lead to… Budget deficit To reductions in support allocated to individuals and companies.

He adds that tax increases and tightening tax controls may impose additional pressure on companies, pointing out that the Russian economy will, in any case, be forced to adapt to high interest rates, sanctions, and limited government support, which will make the coming years difficult for companies and individuals.

Recession trap

Researcher at the Higher Institute of Economics Vladimir Oleshchenko expects the current trend to continue in 2026, because the Central Bank, given the latest expected inflation figures, will not rush to lower the key rate, among other factors discouraging business activity.

He added, in his interview with Al Jazeera Net, that the possibility of falling into recession remains possible, but high government spending will maintain, to some degree, stability. growth Close to zero, which prevents the economy from sliding into a deficit zone.

He points out that the data of the Federal Statistics Service and the estimates of the European Commission do not reflect a comprehensive crisis as much as they reflect the need to adapt to new conditions and search for alternative sources of growth, which is what is actually happening inside Russia.

He explains that Growth rates They have slowed down, but the dynamics are still positive, which is important in light of the growing turmoil, because the economy is working under the pressure of external restrictions, but it maintains its stability by restructuring logistics, domestic investment and technological development.

Olychenko concludes that if external conditions stabilize and a settlement regarding the war in Ukraine is reached, along with the launch of new productive projects, enhanced investments, and continued measures supporting domestic demand, it may become possible to move to a more confident economic growth path.