Russian macro: the economy at a crossroad

RUSSIA ECONOMICS - Report 04 May 2026 by Evgeny Gavrilenkov

In earlier reports, we pointed out that this year’s economic data look a bit puzzling, mainly because of ongoing revisions to historical figures. These updates shift short-term growth patterns, as the adjusted m-o-m numbers from last year heavily influence this year’s y-o-y results. Monthly business surveys from Rosstat might offer some insight or help spot turning points, although they’ve occasionally been misleading in the past. Right now, the business confidence index is negative for both manufacturing and mining, with April showing an uptick for mining (to -4.4% from a significantly lower level) but a further drop for manufacturing (to -3.2%). Since early 2024, both sectors have seen a steady downward trend, yet GDP growth in 2024 sped up to 4.9% from 4.1% in 2023, which doesn’t quite match the persistent slide in the business confidence indicator.

There are a few other controversies in the current economic statistics, such as moderate 1Q26 y-o-y household real disposable income growth (1.5%) amid stronger growth of retail sales (3.6%), and consumption of paid services (3.3%). In addition, the reported relatively robust growth in key elements of household consumption was accompanied by sluggish household credit expansion. It expanded by about 0.9% in nominal terms in the first three months of this year, while cumulative inflation exceeded 2.8%. In the next several months we may see a pattern similar to 2H22 — steady and moderate monthly inflation alongside moderate household credit growth — which could coincide with near-zero or slightly positive GDP growth. Several other indicators suggest that liquidity in the domestic money market is tight, and the demand for government bonds is fading as overall uncertainty is high. If so, then one cannot expect the domestic credit market to start booming. Hence, the current environment looks disinflationary and will likely be accompanied by sluggish or near-zero economic growth, with negative GDP growth also a possibility.

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