WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

Low oil prices and a strong rebound of imports have resulted in the rouble depreciating by about 30% since the beginning of the year, prompting drastic monetary policy tightening. Nevertheless, the economy is continuing to recover on the strength of domestic demand, with military procurement boosting industrial production and construction, and a tight labour market pushing up wages and consumption. This year, growth is projected to exceed 2%, to be followed by a mild deceleration in 2024-2025. A growing addiction to fiscal military stimulus and increased technological backwardness together increase the risk of stagnation (or even outright crisis) once the war is over.