Russian central bank cuts GDP growth forecast to zero, expects faster inflation
The Central Bank of Russia has lowered its 2026 GDP growth forecast to 0.0–1.0% from 0.5–1.5% and raised its inflation forecast to 6–7%, citing fuel price surges triggered by Ukrainian strikes on oil refineries.
The Central Bank of Russia (CBR) has significantly downgraded its economic outlook for the country. The latest forecast sees 2026 GDP growth at 0.0–1.0%, down from the previous 0.5–1.5%. For the fourth quarter, the projection was cut from 1.0–2.0% to 0.0–1.5% year-on-year.
At the same time, the CBR raised its inflation forecast for 2026 to 6–7%, up from an earlier 4.5–5.5%. The main reason cited is the significant increase in fuel prices that has already occurred. The bank noted that inflation expectations among households, businesses, and financial market participants have risen, and their persistence at elevated levels may impede a sustained slowdown in inflation.
CBR Governor Elvira Nabiullina acknowledged at a press conference that the fuel situation constitutes a supply shock. Since mid-May, fuel price growth has accelerated, and in June several Russian regions faced shortages after Ukrainian strikes on Russian oil refineries in response to the war launched by the Kremlin.
Some analysts forecast that by the end of the year inflation in Russia could turn out even higher, including due to strikes by the Ukrainian Armed Forces on Russian logistics centres. The CBR expects that fuel production capacity will gradually be restored by the end of the year, but Ukraine continues to use its "long-range sanctions" in response to Russian attacks. On Saturday, Ukrainian drones struck an oil refinery in Tyumen, a logistics facility in Yekaterinburg, and a fuel and lubricants depot in Rostov-on-Don.
