Russian macro: the government trims expectations of medium-term economic growth
At the end of September, the government released an updated medium-term macroeconomic outlook along with the draft 2027–2029 budget, submitting the necessary documents to the Duma for hearings. Few amendments are expected, and the documents will likely be approved, with only possible minor adjustments. The outlook now appears less optimistic than a year ago, with a “muddle-through” scenario looking most probable—at least for the next year. With geopolitical uncertainty, including Russia-specific factors, still high, projecting beyond 2027 is challenging. The fact that last year’s more hopeful forecasts for 2026 did not materialize reinforces this view, especially considering that oil prices this year have remained well above last year’s expectations.
This year’s total federal budget expenditures are set to rise by about R4.5 trln compared to the initial plan, with average monthly spending topping R4.0 trln. Higher oil prices might boost revenues slightly compared to the original 2026 plan, but the deficit is still expected to widen to over R7.3 trln, or 3.2% of GDP. On paper, the government projects slightly higher revenues in 2027 than this year, while keeping expenditures almost flat next year to narrow the deficit. However, we expect spending to be revised up again in the future, although the scale of such changes remains highly uncertain.
Now read on...
Register to sample a report