Moscow, February 4, 2026 — The Europe Today: President Vladimir Putin announced on Tuesday that Russia’s economy grew by 1 percent in 2025, marking a sharp slowdown compared to growth recorded in the previous two years, as the country continues to face economic pressures linked to the ongoing war in Ukraine.
Speaking at a government meeting, President Putin said Russia’s gross domestic product (GDP) growth had eased significantly from earlier levels. “Russia’s GDP grew by one percent last year. This is lower than the dynamics observed earlier, as we are well aware: in 2023 and 2024, growth was 4.1 percent and 4.3 percent, respectively,” he said, according to media reports.
The Russian economy initially benefited from a surge in military spending following the launch of the Ukraine offensive in 2022, helping Moscow defy forecasts of economic collapse. However, increased state spending has contributed to higher inflation, dampening real economic growth and prompting tighter monetary policy.
President Putin said the slowdown was largely the result of deliberate policy choices aimed at curbing inflation. “This slowdown was not simply expected, one could even say it was man-made: it was connected with targeted measures to reduce inflation,” he noted.
He added that inflation had been brought down to 5.6 percent in 2025, compared with 9.5 percent the previous year. Businesses, however, have expressed concerns over high borrowing costs introduced to contain price pressures, which have weighed on investment and economic activity.
In December, Russia’s central bank cut its benchmark interest rate to 16 percent after inflation showed signs of easing, signaling a cautious shift in monetary policy amid slower economic growth.
