Appreciating ruble, coupled with the growing gap between Brent and Urals oil prices, seems harmful to the economy

RUSSIA ECONOMICS - In Brief 11 Feb 2026 by Evgeny Gavrilenkov

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Rosstat, which frequently updates its statistics, recently reported that GDP growth in 2024 was 4.9%, up from the previously stated 4.3%. With this higher 2024 base, the sharp slowdown in 2025 now seems less surprising. The initial Rosstat’s estimate for 2025 GDP growth is 1.0%, though many monthly economic indicators remain subject to ongoing revisions, meaning the 2025 figures could also change. While some December m-o-m growth numbers for various sectors appeared stronger than in previous years, this likely reflects underreporting in earlier months. In nominal terms, Russia’s GDP reached R213.5 trillion. We plan to dig deeper into the data and share an updated 2026 outlook next week.At this point, most monthly figures suggest a continued slowdown in growth, with an overly strong ruble being one of the key factors. The CBR noted that the real effective ruble rose in 2025 by 17.1% on an average annual basis and 28.0% y-o-y in December. Against the US dollar, the ruble strengthened in December 2025 by 33.4% y-o-y and 17.1% on average over the year, and this surge wasn’t solely due to the falling global dollar index. With the average nominal USD/RUB rate around 83.4 in 2025, Russia’s dollar-denominated GDP reached an almost unprecedented RUB 2.6 trillion.Russia’s current economic trends seem unsustainable, and weak federal budget revenues in January 2026 may push the authorities to take action. With the Urals-to-Brent discount holding at around $15, oil-and-gas revenues remain low, dropping about 50% y-o-y in January. Non-O&G revenues inched up just 4.5%, leading total federal revenues to fall 11.6% y-o-y. Spending in January 2026 was down 1.4% compared to last year, bu...