According to Rosstat data, at the end of September, the overall industrial growth in the country slowed down to 0.3%. on an annual basis – it is almost 19 times less compared to the result at the end of last year (then it was 5.6%).
Factories and plants outside the raw material sector of the economy increased production by only 0.4 percent, although in August they showed an increase of 2.4 percent, and last year it was 9.6 percent.
Key civil sectors are in a phase of declinewhich the Kremlin expected to produce goods that would replace products of foreign companies. According to Rosstat data, in the period from January to September, the production of clothing and footwear in Russia decreased by 3.5 percent, furniture – by 8.2 percent, and food products – by 0.9 percent. The production of flour decreased by 5.6%, cereals – by 6.9%, and sunflower oil – by 16%. The production of computers decreased by 19.3 percent, televisions – by 23.5 percent, refrigerators – by 14.6 percent and washing machines – by 24.8 percent.
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What industrial sectors in Russia are in decline?
What are the forecasts for Russian GDP for next year?
What do economists from Oxford Economics say about the Russian economy?
What changes in VAT is the Russian government planning from 2026?
Rosstat also recorded a decline of almost 20%. in the production of electric locomotives and by 12.5 percent in the production of passenger wagons, and in the case of freight wagons it decreased by 24.2%.
Gloomy moods — and forecasts
So far, the Russian economy has avoided a technical recession (i.e. contraction for two quarters in a row). However, economists from Oxford Economics, an independent economic consultancy established in cooperation with the Faculty of Business at the University of Oxford, estimate that in the period from July to September its growth rate was only 0.2%.
The tightening of Western sanctions, which in October covered Rosneft and Lukoil, companies that extract and export half of all Russian oil, may completely plunge the economy into recession, experts from Oxford Economics estimate.
— The business mood is gloomy – says economist Władysław Inoziemcow. — Entrepreneurs expect a deterioration in general operating conditions, economic stagnation, a decline in consumer demand and an increase in taxes.
To fill the military budget, from 2026 the government is increasing VAT again (to 22%) and is preparing a radical tax reform for small businesses. It will deprive 700 thousand companies a simplified taxation system.
According to Inozemtsov's forecasts, Russian GDP will decline by 1-1.4% next year, but the Kremlin will retain its ability to finance the war. Even if Russian oil exports to India and China fall by one third, “the military will not feel this for at least a year, and most likely also in the long term,” the economist says.
