Russian economy rapidly heading for recession – Ukraine’s intel

This was reported by the Foreign Intelligence Service of Ukraine (FISU), as cited by Ukrinform.

Analysts predict a prolonged downturn in Russia’s economy, likely beginning before July 2026.

“According to estimates by the center for macroeconomic analysis and short-term forecasting, which operates within the Russian government’s orbit, if current trends continue, the recession will almost certainly begin by July 2026 – a scenario that is virtually impossible to avoid,” the report states.

At the start of 2025, the main risk triggers were the central bank’s tight policy and a record-high discount rate. Now, even a gradual reduction in rates does not change the overall outlook.

“The likelihood of a recession is growing, pointing to deeper, structural problems: a decline in business confidence, a slowdown in economic activity, and a weakening of domestic demand. The consensus among Russian analysts is clear – under the current conditions of tight monetary policy, the economy is doomed to decline,” the intelligence service emphasized.

The report notes that warning signs are intensifying. The indicator of recovery from recession fell from 0.345 to 0.1 in October – a value well below the 0.35 threshold, directly signaling the risk of a prolonged recession lasting more than a year. Key contributing factors include the cumulative effect of ruble strengthening, which hits the trade balance, and the expected slowdown of the global economy.

Even a hypothetical end to the war against Ukraine, experts acknowledge, will not be a lifeline. On the contrary, reductions in military orders, declining household incomes, and falling industrial output could deepen the crisis. In 2026, additional fiscal pressure will force the Russian government to reallocate resources to “priority” sectors, preserving imbalances and undermining remaining growth.

“The conclusion, which is becoming increasingly difficult to hide even in Russia itself, is obvious: the decline is systemic. Monetary maneuvers no longer solve anything, and there are virtually no sources left for economic recovery,” the FISU concluded.

As Ukrinform previously reported, since the start of 2022, the war against Ukraine has cost Russian taxpayers an estimated $550 billion – equivalent to 24 annual Russian higher education budgets or 22 health care budgets.

Photo: Flickr