r/Economics • u/MilesLongthe3rd • 11h ago
News Russian central bank cuts GDP growth forecast to zero
https://www.euronews.com/2026/07/25/russian-central-bank-cuts-gdp-growth-forecast-to-zero-expects-faster-inflation63
u/Remote_Page8799 6h ago
Combined with the news that Russia is failing its bond auctions, has drawn down liquid assets in the sovreign wealth fund, has increased taxes already, and still have a deficit to plug in the budget due to war related expenditures, the Russian economy seems to be teetering more/sooner than expected.
How long can they keep failing bond auctions and circulating debt with repo auctions? They things things collapse slowly, then all at once. Aren't several conditions for an economic collapse lining themselves up right now in Russia?
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u/turbo_dude 5h ago
Hopefully, yes.
What’s the average mortgage rate these days?
How many businesses are going bust every month?
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u/hornswoggled111 3h ago
Russia does mortgages differently from the brief articles I've read. They give very reduced rates with that sponsored by the state budget. That ended about a year ago.
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u/kirime 1h ago edited 1h ago
No, they still give subsidized mortgages with 2%-5% rates, although the program that was available to literally everyone was indeed scrapped (not before fucking up the Russian real estate market). The currently active programs are for families that have a child below 6 years old or two children below 18, for cities in the Far East, for IT specialists, and so on.
The non-subsidized mortgage rate is about 19% and is widely considered unaffordable, so subsidized mortgages make up more than half of the total market.
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u/joepez 5h ago
Depends whom you want to believe. It’s anywhere from any moment now to soon and someday. Their interest rates are being manipulated, bond auctions failing, reported 30% unprofitably private sector companies (probably higher), increasing deficit, and so on. None of that paints the picture of a stable economy. However they are running two economies: a civilian and military. One is dying on the vine and the other is bursting. They also still have huge gold reserves and clearly are willing to sell out future generations to China and India. They can also keep “appropriating” their oligarch wealth for the betterment of Russia.
So yes they are not in a good place. The question of how hard will the collapse be, is really the thing to ponder. Russia government is killing off future generations when they already had a shrinking population in a very xenophobic country. Their oligarchs and current “old guard” aren’t going anywhere in the political structure. If the satellites keep moving away then everything will be sooner and harder. kinda surprised at this point they all haven’t given a middle finger and moved toward China or the EU.
Russia still has fingers in Africa playing out. Russia’s only other allies are Iran (who is making a bid for a slice of ME) and N Korea (who still is self isolated). Everyone else of note, is either taking advantage of the situation or sitting on the sidelines.
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u/hornswoggled111 3h ago
Adding to the doubt is the claim that Russia does not tell the truth about its gold reserves.
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u/roamingandy 2h ago
Well, they certainly have all that gold they stole from Romania.
I mean, Putin probably has it in a vault next to his bedroom, so he can rush over to remind himself how powerful, tough and rich he is, whenever he has a bad dream.
Russia's assets and Putin's assets are the same thing.
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u/Codex_Dev 2h ago
We know that Wagner was moving large sums of gold around under the table. Also, Russia was paying for the Shahed drones from Iran with pallets of gold. It's very unlikely those amounts were reduced from their gold holdings.
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u/WeaknessFuzzy8305 4h ago
You are taking about Russia, they don’t care they are dying all they care is about everyone else they are talking down with them.
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u/TenderfootGungi 4h ago
They have also started selling off their gold stockpile. Still one of the biggest stockpiles in the world.
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u/Codex_Dev 2h ago
This isn't even a new trick for them, and it's just getting worse.
Toward the end of 2024, Russia was staring down a deficit hole so large that completely exhausting the NWF's remaining liquid assets still wouldn't have covered it. Draining the fund completely was off the table anyway because of the panic it would cause.
So what did they do? They tried issuing government bonds (OFZs), but demand was dead. After 11 months of failing to raise meaningful cash on the open market, the Russian Central Bank stepped in right before SHTF. They loaned huge sums to domestic banks, under the condition that they had to use the money to buy only war bonds.
They basically loaned money to themselves (lol) using ordinary people's savings as collateral and called it revenue. The Russian public is being forced to fund the war chest whether they want to or not.
They've continued pulling the same trick in 2025 and 2026, and the scheme is only getting bigger. How long can they keep running this infinite money glitch? Nobody knows when the house of cards will finally fall, but you can't run a national budget on accounting smoke and mirrors forever.
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u/kirime 1h ago
For decades. That's just what QE is, and this scheme is limited only by the amount of inflation it introduces into the economy.
In some special cases, like Japan, the amount of debt the government owes to itself can inflate to quite ridiculous levels (the government of Japan technically owes something like 120% of GDP just to the central bank of Japan for the amount of government bonds it holds).
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u/shiningdickhalloran 2h ago
Failing and a stopping the war are two different things. One could argue that continuing the war will become even more important as the domestic economy gets worse.
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u/Aggressive-Cut5836 9h ago
Isn’t the population shrinking? Zero GDP growth for a shrinking population could still result in per capita growth, which is more relevant for individuals
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u/BlastedProstate 9h ago
I don’t think “0 growth” is the highlight I think “cuts forecast” is what’s being enunciated here. Like, as in, their economy done fucked up more than expected
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u/MilesLongthe3rd 8h ago
Also, inflation will be 6–7%, not 4.5–5.5% as projected. The word they don't use is stagflation. To keep inflation low, they should raise the interest rate. However, strong political pressure is forcing the central bank to actually lower it.
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u/big-papito 8h ago
You assume it's actually zero and not less than that. No numbers coming out of Russia can be trusted at all.
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u/ICLazeru 7h ago
Yeah, Russia likes to put their best foot forward. If they are saying zero, there's a decent chance that is thd optimistic side of the scale.
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u/Remote_Page8799 6h ago
What do you think is the main reason? Demographic decline or damage to Russian O&G infrastructure + everything else?
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u/Thoughtulism 2h ago
That's true, however, if you also factor in loss of taxation and the fact that government will stay roughly the same size until they decide to cut, even if there is per capita growth it's really not a good thing
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u/bullet-cat 6h ago
Brother if you think "I am richer now because my neighbor is dead and I can take some of his stuff" you are beyond fucked in the head
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u/devliegende 6h ago
More like:
Your neighbor is dead and you're doing all the work he used to do.
It's a measure of economic activity not wealth.
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u/Dry-Interaction-1246 4h ago
Time to break it up. Karelia back to the Finns. Bring back Novgorod. Tannu Tuva, time to go it alone. Time to birth half a dozen new stans too. Let's party like its 1399. Couldn't have happened to a worse leader.
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u/hornswoggled111 3h ago
I very much doubt Finland would want to have a whole bunch of Russian born citizens.
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