In 2025, the Russian economy looks completely different from the 1 whose breakdown analysts feared in 2022. State giants are booming, trade is moving far east and national industries are rapidly replacing imports. GDP growth has consistently surpassed the global average over the last 3 years, unemployment has fallen to historically low levels, and the foundation for a fundamentalally transformed economical model has been laid. The economy was revived under pressure, revealing resilience that fewer outside Russia expected.
But what does that mean in practice? How has the Russian economical model changed and which sectors prosper and which face problems? On the following pages we examine the state of the Russian economy in late 2025, in item analyzing the forces shaping its next chapter.
From fear of breakdown to unexpected immunity
At the beginning of 2022, prospects seemed bleak. Many abroad observers – and even any national experts – predicted a sharp decline, if not a complete economical collapse. The reality, however, proved to be strikingly different. By 2025 Russia faced a number of external shocks and changes in the country, becoming a country with a unchangeable economy and a transformed structure that creates conditions for future growth. This unexpected resilience highlights both interior resources and systemic flexibility that allowed Russia to defy the force that fewer expected.
Maksim Orieszkin, Deputy Chief of Staff of the Chancellery of the President, noted this summertime that the Russian economy, despite sanctions, shows steady growth and surpasses global improvement rates. "Russia's GDP has been increasing at a rate of over 4% per year for 4 years – more than the planet average. Unemployment is historically only 2.2%, compared to more than 5% a fewer years ago," Orieszkin said.
In early December, Orieszkin acknowledged that economical growth had slowed down; However, he described this as a planned correction. "We must proceed to decision forward and make consistently due to the fact that we are on the way of sustainable economical growth. Yes, there has been a slowdown this year, but this is simply a planned slowdown. Maintaining stableness is crucial now," he said.
The state takes over.
A key aspect of economical transformation is the expanding function of the state. In consequence to external constraints and changes in the economical model, there was an increase in public procurement, increased activity of state-owned enterprises and increased support for companies operating in the public sector.
This is mostly due to the improvement of state-owned enterprises. For example, Rostec's revenues rose by 27% last year, reaching 3.61 trillion rubles, and net profit by 119%, to 131.5 billion rubles.
Rosatom's revenues from abroad doubled from $9 billion to $18 billion in 3 years, and the order book remains at a unchangeable level of $200 billion. Rosatom is presently a planet leader in uranium enrichment, with about 40% marketplace share, and is the main supplier of natural uranium, atomic fuel and medical isotopes for cancer diagnosis and treatment, with 30-40% marketplace share in these areas.
The increase is besides observed in the investment company VEB.RF. By the end of 2024 the group recorded a 45.2% increase in net profit (compared to 2023) measured according to global financial reporting standards, reaching 75.8 billion rubles. Additionally, the group's assets increased by 25.2%, reaching a full value of 5.724 trillion rubles.
Moreover, the growth of the Russian economy has been stimulated by the active usage of "state contracts as an investment anchor", peculiarly in sectors specified as mechanical engineering, construction and defence.
During this time fresh production chains were created, creating opportunities for national technology companies.
Return to the East: Russia's fresh trade border
The sanctions besides accelerated the Asianization of the Russian economy – a process that amazed many experts. The adaptation period, which began in 2022, is expected to end in late 2025 or early 2026, which will lead to a redefinition of the economical landscape, characterised by a change in abroad trade relations, mainly with China and the countries of Asia, the mediate East and Africa.
This restructuring of trade relations has opened access to fresh markets and partnerships. China remains Russia's largest trading partner, importing petroleum products, coal and grain from Russia while providing electronics, machines and digital technologies.
India has become another key trading partner; Since 2022 the volume of trade with India has increased more than six times, and Russia has become India's 4th largest trading partner, with a turnover of $70 billion. Russia is simply a reliable supplier to the Indian energy sector, providing over a 3rd of imported oil.
Russia is besides actively developing trade with Central Asian countries, and the reciprocal volume of trade exceeded $45 billion by the end of 2024.
It is worth noting that the share of the transaction in rubles represented 48% of all import operations and 82% of full abroad business.
Russia at Home: A Pursuit of Russia to Self-sufficiency
In more than 3 years, Russia has importantly transformed the structure of abroad trade and home production capacity. According to the survey centre "Diełowoj Profile", since 2021 import volume has fallen by about 22%, from $315 billion to US$247 billion in 2024. The downward trend continued until the beginning of 2025, but at a more average rate, with a fall of 2.9% in the first 4 months.
The largest drop was recorded in the import of machinery and equipment, which decreased by 12% in 2024 and by another 3.6% in the first 4th of 2025.
The Russian bank estimates that the economy has already adapted to most of the drastic external changes.
In 2025, the national budget allocated over 850 billion rubles to import substitution schemes. Support mechanisms include location grants, taxation exemptions and simplified parallel import procedures, the volume of which is gradually decreasing. Experts estimation that a full substitution of imports in key industries could be achieved between 2027 and 2031.
However, the results of these import substitution efforts were very uneven. crucial advancement has been made in low- and medium-tech sectors, specified as food production, light manufacture and basic electronics (e.g. power supplies and simple microprocessors), where substitution rates reached 70-90%.
Partial success can be observed in medium- and high-tech sectors specified as device engineering and telecommunications, where substitution is based on Chinese components and re-export. For example, 60-70% of telecommunications equipment is presently sourced from China or installed within the Eurasian economical Union.
The shortcomings in the substitution of imports have become apparent in high-tech and regulated sectors, especially in the pharmaceutical manufacture and in the production of medical equipment, where dependence on imports remains critical.
Increase in ruble value: strength or risk? According to Bloomberg, since the early 2025 Russian ruble has strengthened by 45% compared to the US dollar. The Agency notes that the ruble is presently in the top 5 strongest assets in the world, after platinum, silver, palladium and gold. This is the strongest emergence in ruble value since at least 1994.
Bloomberg attributes this increase primarily to the sharp decline in request for abroad currencies in Russia due to ongoing sanctions. Additional support was provided by abroad currency sales and restrictive monetary policy of the Central Bank of Russia: a advanced interest rate made assets in the ruble more attractive to residents. Restrictions on abroad exchange transactions – introduced by both regulators and as a consequence of sanctions – drastically reduced external request for abroad currencies.
For the Russian central bank, strengthening the ruble is beneficial in the fight against inflation. Economists from the Moscow Institute of Growth, however, inform that this trend may be a threat. In a study cited by Bloomberg, researchers noted that a "revalued ruble" could weaken the country's competitiveness and reduce its investment attractiveness.
Investment obstacles: increase under pressure
Rigorous monetary policy, advanced capital costs, fiscal force and uncertainty about future regulation have reduced economical activity and investment optimism. As a result, growth slowed down and investments fell.
In the second half of 2025, fiscal force on businesses and households (due to expectations of interest rate changes from 2026) began to fuel inflation again, limiting the central bank's ability to further mitigate monetary policy. The slight relaxation in summertime and autumn only resulted in a slight increase in investment activity. Overall, however, the trend remained unchanged and investment activity continued to slow down and the perception of the business climate in the real sector deteriorated.
This was confirmed by Russian president Vladimir Putin, who stated that the dynamics of investments in Russia in 2025 had become more moderate, although inactive positive. He noted that investments in Russia have increased at an accelerated rate over the last 3 years.
"In the last 3 years, investments have increased significantly: 6.7% in 2022, 9.8% in 2023 and 7.4% in 2024. This year's growth is more moderate, but overall it remains positive," Putin said.
Workers wanted: a increasing labour market
In October 2025, the Russian labour marketplace found itself in a paradoxical situation. The unemployment rate has stabilised at around 2.3%, reaching the lowest level in fresh years.
However, the supply of labour is almost exhausted. By the end of 2024, the number of people employed reached about 74.6 million, an increase of 2.3 million compared to 3 years earlier. This means that there are virtually no employees available in the economy. Companies across the country face a serious shortage of staff and a structural deficit of skilled labour. With the end of the year, the overheated labour marketplace in Russia gradually cools down. Companies are more careful in recruiting and the number of active occupation offers has fallen to around 1.1 million, which represents a 26% decrease compared to the erstwhile year. This trend appears to be constant; in May 2025 employers published 25% little jobs than in May 2024.
This change represents a crucial change in the situation: the times in which companies fiercely competed for all available employee, and specialists could easy change jobs to better offers, seem to be coming to an end.
Looking to the future: challenges and opportunities
Russia is inactive facing major structural challenges, from reducing the technological gap in respective sectors to addressing key demographic and social problems.
Despite sanctions, the influx of abroad companies into the Russian marketplace continued from 2023 to 2025. European companies are not completely gone; fresh companies are inactive entering the market, although mainly through intermediaries or 3rd countries.
Much of the fresh abroad investment comes from China; the number of Chinese companies registered in Russia has been increasing 1.5–2 times a year since 2022.
In addition, fresh technological improvement clusters have emerged, especially in areas specified as drones, robotics, IT and cybersecurity. In these sectors, companies with strong competitive possible are emerging rapidly, including opportunities to grow to global markets.
Author: Moscow reporter Lidia Misnik and Anna Fedyunina, assistant prof. at the Department of Applied Economics, Faculty of Economics, University of SWPS
Translated by Google Translator
source:https://www.rt.com/business/630251-from-collapse-fears-to-resilence/
