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Russia’s wartime boom is rapidly losing steam. Once buoyed by massive defense spending, the economy is now entering a severe slowdown. The IMF has downgraded its forecast to just 0.9 % GDP growth in 2025, down from earlier optimism, and Russia is officially described by its Economy Minister as “on the brink” of recession . Manufacturing and retail sectors have faltered, while industrial output contracts and inflation remains persistently high .
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The banking system is cracking—credit card defaults surged by roughly 70 % within months, nonperforming loans are hidden in the trillions, and liquidity is draining fast . Household staples like potatoes, onions, and butter have seen price hikes of up to 92 % .
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Underlying these trends are demographic and structural weaknesses: Russia loses nearly a million people annually through war, emigration, and population ageing, straining labor supply and eroding economic dynamism .
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Politically, the mysterious death of high‑level officials like former transport minister Roman Starovoit hints at intensifying domestic turmoil and elite insecurity .
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While the Kremlin portrays strength, analysts warn this is “growth on budgetary amphetamines” and likely unsustainable. As the war’s economic engines falter, the risk of cascading collapse—from finance to governance—looms larger than ever.
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