Russian Economy Faces Slower Growth and Ruble Depreciation According to Ministry of Economic Development’s Forecast

The Russian economy will experience slower growth, a sustained ruble depreciation in the coming years, and will receive much less export revenue than expected. The Ministry of Economic Development of the Russian Federation included these parameters in the macro forecast for 2025-2027, which was presented at a government meeting on Tuesday (its parameters are published by Interfax).

According to the Ministry of Economic Development, the average dollar exchange rate at the end of this year will be 94.7 rubles, next year it will rise to 98.6 rubles, and a year later it will be triple-digit: 101.2 rubles in 2026 and 103.8 rubles in 2027.

The ministry’s estimates were made worse: back in September, the Ministry of Economic Development expected that the dollar would cost an average of 90.1 rubles this year, and that by 2025 it would rise in price only to 92.3 rubles. Thus, over six months, the government’s exchange rate forecast increased by almost 10 rubles per dollar, despite strict controls on foreign exchange and the obligation of large companies to take almost all of their earnings. sell foreign exchange on the stock exchange.

The problem is on the export income side of the economy, as follows from the data of the Ministry of Economic Development: against the background of problems with payments through the banks of “friendly” countries and the tightening of the sanctions regime of the USA, last year exports of foreign goods brought in $35 billion more than the authorities expected ($424 billion instead of $459 billion). And this trend will continue: the Ministry of Economic Development reduced the export forecast for this year from $471 billion to $429 billion, for 2025 – from $481 billion to $456 billion, for 2026 – from $497 billion to $474 billion.

In total, for 2024–2026, according to the Ministry of Economic Development, the economy will receive $90 billion less in export revenue than was expected just six months ago. At the same time, the GDP growth rate from 3.6% last year will decrease to 2.8% this year, 2.3% in 2025 and 2026. and 2.4% in 2027.

The estimates of the Ministry of Economic Development for the average dollar exchange rate – 98.6 rubles in 2025 and 101.2 rubles in 2026 – means that the 100 mark will be reached in reality next year, wrote analysts at Hard Figures. This is partly explained by a decrease in the expected export prices for Russian oil, they point out: if the authorities in September believed that they would sell a barrel of Urals at $70- 71, now they budget only $65 for the entire three years. a rehearsal.

Last year, the ruble showed the strongest fall since 2015 and entered the top 3 ranks of the weakest currencies in developing countries, which Music from Bloomberg. The dollar rose 26% over the year, the euro rose 28%, and the Chinese yuan rose 24%. Only two currencies in the world showed a stronger fall against the dollar: the Turkish lira (by 36.6%) and the Argentine peso (by 78%).

In order to put out the fire in the foreign exchange market, the Central Bank introduced the compulsory sale of foreign currency earnings for 43 largest exporters, and then it itself began to sell currency foreign from reserves. This established the ruble at just over 90 rubles per dollar. And the authorities do not see the need to prevent the current situation, said the head of the Ministry of Economic Development Maxim Reshetnikov at a government meeting on Thursday.

“The level of 94-95 rubles per dollar is now comfortable” for the economy, he stressed.

Reshetnikov said that the peak of ruble strengthening “passed” last year, and in the future “the exchange rate will weaken according to the difference in inflation.” “