Overview

• wiiw halves Russia’s GDP growth outlook to 2% in 2025 and projects a further slowdown to 1.8% in 2026 under a 20% key interest rate
• Ukraine’s 2025 growth forecast is trimmed by 0.5 percentage points to 2.5% amid 16% inflation and widespread wartime infrastructure damage
• Russia’s central bank ‘full brake’ policy is making loans unaffordable and raising the prospect of a wave of corporate bankruptcies
• Ukraine also faces a worsening labor shortage from mobilization, drought-hit harvests and the temporary end of EU agricultural tariff relief
• Private consumption is set to propel Central, Eastern and Southeastern Europe past eurozone growth, with Poland leading at 3.5% in both 2025 and 2026