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Russia  ·  Chronicles · Klaus Dormann

Analyst Survey: Growth Will Continue to Slow in 2026, but the Ruble Remains Strong

June 1, 2026  ·  12 min read  ·  By Klaus Dormann  ·  Original (German)
Analyst Survey: Growth Will Continue to Slow in 2026, but the Ruble Remains Strong

Author: Klaus Dormann

On May 12, the Russian government lowered its forecast for this year’s Russian economic growth from 1.3 to 0.4 percent. However, a few days later, the European Commission (+1.3%) and Germany’s “German Council of Economic Experts” (+1.2%) published significantly higher forecasts for 2026.

“Analysts” at banks and institutions apparently consider the government’s low forecast to be more realistic. In any case, Russian and international experts surveyed by the Economic Research Institute of Moscow’s “Higher School of Economics” from May 18 to 27 now expect economic growth this year to be similarly weak as the government does. They lowered their average forecast for this year’s real gross domestic product growth to 0.6 percent. In February, they had still anticipated an increase of 0.9 percent.

The analysts’ average forecast for growth next year also largely aligns with the government’s assessment. Analysts expect GDP growth to accelerate to 1.3 percent in 2027. The government expects economic growth to pick up to 1.4 percent by then. The European Commission and the German Council of Economic Experts, however, do not forecast an acceleration for next year, but rather a slight decline in the growth rate.

GDP Forecasts for Russia 2024–2027
Year-over-year change in real gross domestic product, in percent

HSE Survey: The Economic “Slowdown” Will Barely Reduce Inflation in 2026

The results of the latest analyst survey listed by the Higher School of Economics in the table below show that, despite the continued slowdown in economic growth, the experts surveyed expect an inflation rate that is, on average, barely lower (5.4%) than that reached in December 2025 (5.6%). By comparison, the Central Bank’s forecast puts the inflation rate at the end of 2026 in a range of 4.5% to 5.5%.

The key interest rate, which was most recently lowered to 14.5% on April 24, is expected to be reduced by a total of about two additional percentage points by the end of the year, according to the HSE consensus forecast. On average, analysts then expect a key interest rate of around 12.4 percent.

HSE Consensus Forecast for 2026–2032
(Expert Survey, May 18–27, 2026)

Higher School of Economics, S.V. Smirnov: Consensus forecast by the Development Center Institute, May 27, 2026

The sharply appreciated ruble will depreciate noticeably by year-end

The Russian ruble has appreciated significantly against the U.S. dollar since early 2025. Most recently, one dollar cost only about 71 rubles. It is thus at its strongest level since early 2023.

However, the HSE survey found that experts now expect the ruble to depreciate significantly by the end of 2026. They anticipate that by year-end, one U.S. dollar will cost around 83 rubles.

Economic “Downturn,” but Currency “Upturn”

Headlines regarding the Russian ruble’s appreciation to date have been piling up in recent weeks. No wonder: the annual growth of the Russian economy already slowed last year from 4.9 percent to just 1.0 percent. For the current year, the majority of experts now expect even less growth. At the same time, however, the Russian ruble has gained significant value against both the U.S. dollar and the Chinese yuan. Fewer and fewer rubles are needed to purchase a unit of foreign currency. This makes Russian imports, which must be paid for in foreign currency, “cheaper.”

How does this all fit together? “Normally,” the equation is: weak economy = weak currency. Why is the ruble so strong, even though it is in less demand than before? After all, many countries have drastically reduced their trade with Russia because it has been hit with sanctions due to the war in Ukraine. Numerous Western companies have left the country. Foreign investment has plummeted. Furthermore, a large portion of Russia’s foreign trade is no longer conducted in rubles. China has been Russia’s largest trading partner for 16 years, and the Chinese yuan is the most important currency in Russian foreign trade (see also IFW Kiel).

The English-language channel “Joe Blogs” analyzed these and other questions regarding the ruble’s performance in a video on May 20. “Joe Blogs” is run by a former financial analyst and management consultant. Below is a summary of his analysis.

How the ruble has performed against the U.S. dollar

Over the past 10 years, the ruble’s exchange rate remained relatively stable for a long time within a range of about 60 to 70 rubles per U.S. dollar. In 2020—during the COVID pandemic and as oil prices plummeted—the ruble weakened: The exchange rate rose from around 62 rubles per dollar before the COVID crisis to about 80 rubles at the peak of the pandemic. This is a sign of how vulnerable the Russian economy is to shocks in global energy markets.

The ruble’s depreciation was even more severe four years ago in 2022, following the invasion of Ukraine. At that time, initial sanctions were imposed and Russia’s foreign exchange reserves were frozen. Within Russia, many feared a severe financial crisis with bank failures. At its peak, the exchange rate reached around 120 rubles to the U.S. dollar.

Ruble per US Dollar over the last 5 years

Trading Economics: Russian Ruble, May 29, 2026

However, after this initial slump, the ruble recovered quickly. By mid-2022, it had even reached an exchange rate of about 50 rubles per U.S. dollar—its strongest level in about ten years. However, it subsequently weakened significantly again until around the end of 2024. Since then, the ruble has appreciated significantly. It is now stronger than it has been since early 2023.

This was unexpected: “Normally,” currencies appreciate when an economy is booming. Foreign capital then flows into the country, increasing global demand for that currency. In Russia, however, economic growth slowed sharply as early as last year.

What interest does the Russian government have in a strong ruble?

Historical experience shows that countries under sanctions often benefit from a currency devaluation. In Russia, however, the ruble is appreciating despite the sanctions. What explanations are there for this? Does the Russian government have an interest in a strong ruble?

The first explanation is the government’s interest in more stable prices. Russia has been battling a very high inflation rate for quite some time. One of the quickest ways to curb imported inflation is to strengthen the country’s own currency. After all, a strong ruble makes imports cheaper. Politically, this is of great significance. If the ruble collapses, domestic prices will skyrocket. The Russian population will then feel the impact of inflation in very sensitive areas such as food, electronics, cars, medicines, and other consumer goods. From the government’s perspective, it is therefore likely very important to maintain a strong currency.

A second aspect, from a political perspective, is that a strong currency has a psychological impact. Headlines celebrating the ruble as the “strongest currency” then appear—as they have in recent weeks. The government can present this as proof that Russia is resilient and that the sanctions have come to nothing. An appreciation holds enormous propaganda value for the government both domestically and internationally. Currencies have symbolic significance: a strong currency is equated with national strength.

A third possibility is that the government is concerned with the stability of the financial system. The Russian banking system has been under enormous pressure since the sanctions began. A weak ruble carries the risk of triggering capital flight, which could lead to panic and instability in the banking sector. If the authorities keep the exchange rate relatively strong, they can expect to maintain confidence in the financial system.

What are the disadvantages of a strong ruble?

However, a rise in the ruble’s value also has serious drawbacks: the stronger the currency becomes, the more difficult it is for exporters. And at its core, the Russian economy remains an export-oriented commodity economy. It is based on oil, gas, metals, and other raw materials. These are the sources of the country’s revenue.

If the revenues of these exporters come under pressure due to the ruble’s appreciation while their costs continue to rise as a result of inflation and war-related burdens, the profitability of these companies ultimately suffers massively. But if corporate profitability declines, so do the government’s tax revenues. And if tax revenues fall while military spending remains at extremely high levels, the Russian state’s finances come under increasing pressure.

“Joe Blogs”’ conclusion: The ruble exchange rate is a “managed exchange rate”

Based on these considerations, “Joe Blogs” draws the following conclusions, among others:

What we are seeing in Russia “is not a truly strong currency backed by a strong economy, but a managed exchange rate used as a political and financial tool. … The reality is that, according to many analysts, the ruble would likely trade at a significantly weaker level than it does currently in a free and fully open market.”

“Joe Blogs” emphasizes that the ruble exchange rate does not form in a “normal economic environment.” Russia is an economy characterized by sanctions, capital controls, restrictions on capital movements, massive state intervention, and a growing dependence on China.

Recommended reading:

Forecasts:

Foreign Trade: Ruble Exchange Rate, Sanctions, and Trade with China:

Economic data: Industrial production in April:

Politics and Economy in Russia; Overall Economic Development:

Translated from the German original published on ostwirtschaft.de, June 1, 2026.

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