Forecast of lower growth for Russia, Ukraine as war keeps rates high
The economic prospects of nations at the Russian war and Ukraine continue to deteriorate, according to a new forecast of the Vienna Institute for International Economic Studies (Wiiw).
This year, growth in Russia should be reduced by two to 2% compared to the previous year, Wiiw announced. For 2026, Moscow can only expect an increase of 1.8%.
The main reason for the decline would be monetary policy “stop” implemented by the Russian central bank to control inflation.
The high interest rates of 20% suffocate the economy, because loans become unaffordable and many citizens leave their money to the bank, said the expert in Russia in Russia Vasily Astrov.
“Unsurprisingly, a wave of bankruptcies also threatens companies, which could partly include large companies and key companies,” he added.
kyiv problems: destruction and bad harvest
The prospects of Ukraine, the country that Russia attacked during a large -scale invasion over three years ago, is not better.
The destruction of critical infrastructure caused by Russian attacks leaves increasingly deep scars, according to the Ukraine expert of the reflection group, Olga Pindyuk.
“The worsening of the shortage of labor due to the mobilization of war also weighs heavily on the economy,” she said.
In addition, the effects of a poor harvest expected due to the drought and the temporary end of price reduction for agricultural exports to the European Union aggravate the situation.
For 2025, the Institute revised the revised growth of 0.5 percentage points to 2.5% compared to its spring forecasts. Inflation in the country is 16%, with high key interest rates accordingly.
