Almost 80% Of Russian Industry Has Slipped Into Recession
5- 28.10.2025, 14:47
- 3,930
Business sentiment is generally gloomy.
18 out of 24 branches of the Russian manufacturing industry, which accounts for almost 80% of all goods produced in the country, are experiencing a decline in production. Such data are cited in the report by experts of the Institute of National Economic Forecasting of the Russian Academy of Sciences, writes The Moscow Times.
According to Rosstat, by the end of September, the overall growth of industry in the country slowed down to 0.3% in annual terms - almost 19 times compared to the final result of last year (+5.6%).
Factories and plants outside the raw materials sector of the economy increased output by only 0.4%, although back in August they showed growth of 2.4%, and at the end of last year they increased production by 9.6%.
In the zone of decline were key civilian industries, from which the Kremlin expected to replace the goods of the departed foreign companies. According to Rosstat, in January-September the output of clothing and footwear fell by 3.5%, furniture - by 8.2%, food products - by 0.9%.
Meal production fell by 5.6%, cereals - by 6.9%, sunflower oil - by 16%. The production of computers fell by 19.3%, TV sets - by 23.5%, refrigerators - by 14.6%, washing machines - by 24.8%.
Rosstat recorded a decline of almost 20% in the production of electric locomotives, by 12.5% - in the production of passenger cars, by 24.2% fell in the production of freight cars.
The Russian economy has so far avoided a technical recession (i.e. quarterly decline for two consecutive quarters), but for July-September its growth rate will be a paltry 0.2%, Oxford Economics economists predict.
The intensification of Western sanctions, under which Rosneft and Lukoil - which pump and export half of all Russian oil - fell in October, may well push the economy into negative territory, Oxford Economics predicts.
"Business sentiment is generally gloomy," states economist Vladislav Inozemtsev. - Entrepreneurs expect worsening general conditions, economic stagnation, lower consumer demand and higher taxes."
To fill the military budget, the government is raising VAT again from 2026 (to 22%), and is also preparing a radical tax reform for small businesses, which will deprive 700,000 entrepreneurs of the simplified taxation system.
Inozemtsev predicts that Russian GDP will shrink by 1-1.4% next year, but the Kremlin will retain the ability to finance the war. Even if Russian oil exports to India and China fall by a third, "the military will not feel it for at least a year, and most likely in the longer term," the economist said.
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