Preliminary data showed GDP fell 0.3% in the first quarter of 2026, after defense production helped sustain growth in 2023 and 2024. Analysts say the slowdown reflects Western sanctions, high borrowing costs, weaker consumer demand and growing pressure on civilian industries. The downturn has prompted President Vladimir Putin to demand proposals from officials to revive growth. Moscow has been accused of manipulating economic data to project resilience despite mounting strain. Russia’s biggest banking and financial services company, the state-owned Sberbank, has cut its 2026 growth forecast to between 0.5% and 1%, while the country’s government is also expected to revise its outlook. “The resilience miracle of the Russian economy is largely over,” one analyst said.
