Russian GDP growth slows in first quarter of 2025

Russia's economic growth slowed to 1.4 per cent year-on-year in the first quarter of 2025, the lowest quarterly figure in two years, data from the official state statistics agency showed on Friday.

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Economists have warned for months of a slowdown in the Russian economy, with falling oil prices, high interest rates and a downturn in manufacturing all contributing to headwinds.

Moscow reported strong economic growth in 2023 and 2024, largely due to massive state defence spending on the Ukraine conflict.

But economists have cautioned that growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity.

The Russian economy grew by 1.4 per cent year-on-year in the first three months of the year, the lowest quarterly figure since the first quarter of 2023, Rosstat data showed.

The economy expanded 4.5 per cent in the previous quarter, according to the data.

Prices have also been rising quickly across the Russian economy for months, driven up by massive government spending on the Ukraine conflict and deep labour shortages.

Inflation in April remained above 10 per cent for the third month in a row, figures showed.

Last month, the Russian central bank maintained its key interest rate at 218, with inflation starting to decline but new risks facing the Russian economy because of global economic turbulence triggered by US trade tariffs.