IMF Forecast: Russia Is Growing Faster Than Germany
In its July forecast for Russia, the International Monetary Fund (IMF) projects growth of 1.1% for both 2026 and 2027. The IMF is thus sticking to its April forecast, while nearly all other institutions are lowering their projections. According to estimates by the Ministry of Economic Development, Russia’s real gross domestic product rose by only 0.3% year-over-year in the first half of 2026. The Russian Central Bank revised its forecast range at the end of July to 0 to 1%, down from the previous range of 0.5 to 1.5%.
The IMF expects Germany to see lower growth than Russia, at 0.7% for 2026 and 1% for 2027. Measured in terms of purchasing power parity, Russia had already displaced Germany from fourth place among the world’s largest economies by 2021. Germany currently ranks sixth, behind China, the U.S., India, Russia, and Japan. In dollar terms, however, Germany has overtaken Japan due to a strong euro and ranks third, behind the U.S. and China.
The IMF expects higher commodity prices
In 2023, Russia’s economy grew by 4.1%, then by 4.9% in 2024, before growth cooled to 1.0% in 2025. In the July 8 update to its World Economic Outlook, the IMF maintains its forecast of 1.1% for both 2026 and 2027, exactly matching the figure from its spring forecast. The Fund explains that higher commodity prices are providing relief to Russia as an energy exporter: “Stronger export revenues, partly due to higher commodity prices, are providing some relief to the Russian economy and keeping the growth rate at 1.1%.”
The oil price is the key factor. For the average price of the benchmark Brent crude, the IMF expects a 31.8% increase in 2026 to $89.27 per barrel compared with the previous year. In April, it had projected a 21.4% increase to $82.22. In 2027, the price is expected to fall by 11.8% to $78.70. On July 9, the price of Russian Urals crude stood at $56 per barrel, about 26% below the Brent price of $76.
War with Iran as a Brake on Recession
The Institute for Economic Forecasting of the Russian Academy of Sciences (IEF-RAS) prefaces its quarterly forecast of July 30 with a remarkable thesis: “The change in external conditions is sparing the Russian federal budget from cuts and the Russian economy from a recession.” This refers to the rise in export prices and the increased demand for Russian raw materials following the closure of the Strait of Hormuz. According to the institute’s assessment, without this effect, the government would have had to significantly cut its budget expenditures as early as 2026.
However, the relief is modest. In an analysis by the Brussels-based Bruegel Institute, Marek Dabrowski estimates that the additional revenue in the Russian federal budget attributable to Iran amounts to about 0.5% of gross domestic product. Despite higher Urals prices, the budget’s oil and gas revenues fell by 22.7% to 3.66 trillion rubles—equivalent to about 41 billion euros—in the first half of the year. The IEF itself forecasts growth of only 0.7% for 2026 and 1.1% for 2027. This growth is expected to be driven by private consumption, which could rise by 1.8%, and government consumption, with an increase of 1%, while gross fixed capital formation is projected to decline by 1.2%.
“Near Zero”: Institutions Lower Forecasts
The Ministry of Economic Development had already halved its forecast in mid-May from 1.3% to 0.4%. According to the Moscow business newspaper Vedomosti, Sberbank lowered its forecast to 0% to 0.5%, and VTB Bank to 0.6%. The Vienna Institute for International Economic Studies (wiiw) puts the figure at 0.6%. Among German institutions, the Kiel Institute for the World Economy forecasts 0.2% in its summer forecast, while the Munich-based ifo Institute even expects a recession, with a contraction of 0.7%. Vasily Astrov, a Russia expert at the Vienna Institute (wiiw), went even further in late July on the Russia podcast of the Austrian newspaper “Die Presse”: Today, he would set his forecast for this year’s growth “probably closer to zero.” He said this is not an acute crisis, but “either way,” Russia is stuck in a period of stagnation.
The first-half data support the skeptics. In the first quarter, gross domestic product fell by 0.2%; in the second, it rose by 0.9%; and in June, by 1.1%. Industrial production grew by 0.4% in the first half of the year. The BOFIT research institute of the Finnish Central Bank attributes this increase almost entirely to defense manufacturing: production of other transportation equipment rose by 32%, pharmaceuticals by 14%, and other metal products by 9%. Mining contracted by 0.5%.
Source: IMF, BOFIT, Bruegel, Interfax, Bank of Russia, wiiw (all EN); Die Presse; IEF-RAS, Vedomosti (RU)
Source: German-Russian Chamber of Foreign Trade, IMF Forecast: Russia Grows Faster Than Germany, August 4, 2026.
This article was prepared for the German-Russian Chamber of Foreign Trade.