The decline significantly missed the bank\u2019s earlier projection of 1.6% annualized growth for the period. Policymakers attributed the slump to a value-added tax increase at the start of the year,\u00a0\u201cunfavorable weather conditions,\u201d as well as three fewer working days in January and February than last year.<\/p>\n
In April, President Vladimir Putin\u00a0said<\/a> some of those reasons were insufficient in explaining why the economy is performing worse than expected and called for urgent measures to revive growth.<\/p>\n The slump comes as the Central Bank gradually cuts its key interest rate from a two-decade high.\u00a0Punishingly high borrowing costs over the last two years have stifled manufacturing and business investment, even as policymakers struggle to rein in inflation that continues to erode domestic purchasing power.<\/p>\n \t\tnews \t\t\t\tUniCredit to Sell Part of Russian Subsidiary to UAE Investor Russia\u2019s Central Bank said in its medium-term forecast that it expects economic activity to rebound in the second quarter, forecasting 0.9% growth between April and June due to a higher number of working days in the period compared to last year.<\/p>\n For the full year, policymakers maintained their 2026 GDP growth forecast at a modest 0.5-1.5%, citing subdued consumer demand and investment activity.<\/p>\n The Central Bank also indicated it is now \u201cmore cautious\u201d about lowering its key interest rate, pointing to inflationary risks tied to \u201cexternal conditions and budget policy parameters,\u201d\u00a0a reference to the war in Iran and its impact on energy markets.<\/p>\n First-quarter inflation was 5.9%, slightly lower than the 6.3% previously forecast. Policymakers attributed this to weaker domestic demand and slower price growth for volatile goods.<\/p>\n The Central Bank set a target range of 4.5% to 5.5% for inflation in 2026, with the goal of returning to its 4% target next year.<\/p>\n A Message from The Moscow Times:<\/p>\n Dear readers,<\/p>\n We are facing unprecedented challenges. Russia’s Prosecutor General’s Office has designated The Moscow Times as an “undesirable” organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a “foreign agent.”<\/p>\n These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work “discredits the decisions of the Russian leadership.” We see things differently: we strive to provide accurate, unbiased reporting on Russia.<\/p>\n We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help<\/a>.<\/p>\n Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It’s quick to set up, and every contribution makes a significant impact.<\/p>\n By supporting The Moscow Times, you’re defending open, independent journalism in the face of repression. Thank you for standing with us.<\/p>\n \n\t\t\t\tContinue\n\t\t\t<\/p>\n \t\t\t\t Not ready to support today? \u00d7<\/p>\n \t\tRemind me next month<\/p>\n \n\t\t\tThank you! Your reminder is set.\n\t\t<\/p>\n
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