According to a new UN report, growth in 2025 was 2.2%, and a decline to 2.1% is expected in the following year. The slowdown in GDP growth in the region is primarily linked to the economic situation in the Russian Federation. At the same time, the countries of the Caucasus and Central Asia are showing positive dynamics, which is expected to continue into 2026. Limited dependence on the American market helps reduce the impact of increased US tariffs.
Russia is facing low growth
The Russian economy is projected to grow by only 1% in 2026, which is slightly higher than the 0.8% figure in 2025. Despite the anticipated easing of monetary policy, growth will be constrained by a labor shortage, declining consumer spending, and tightening fiscal policy.
Sanctions, primarily concerning oil exports and imports of high-tech goods, continue to negatively affect the country's economy.
Forecast for Ukraine: growth at 2.3%
The Ukrainian economy, according to the report, faced severe challenges in 2025 due to hostilities and problems with energy infrastructure, which impacted production capacities. A GDP growth of 2.3% is expected in 2026, significantly higher than the projected 1.5% in the previous year.
However, Ukraine's future remains uncertain due to the situation at the front and the timelines for recovery efforts.
Caucasus and Central Asia: positive trends
In the countries of the Caucasus and Central Asia, the influence related to their role as transit points for trade with Russia is gradually decreasing.
The positive dynamics in these regions are explained by the growth of private consumption, an increase in real incomes, and a decrease in unemployment, as well as a steady influx of remittances and active growth in household lending.
Government investments, including infrastructure projects, also contribute to economic growth.
Acceleration of inflation
The report emphasizes that many CIS countries are experiencing an acceleration of inflation, which is related to both general factors such as rising food prices and increased budget expenditures, as well as individual circumstances in each country.
Globally, governments are facing a complex inflationary situation, partly caused by climate change. Experts note that while monetary policy remains a key tool in combating inflation, it should be complemented by reliable fiscal measures and policies aimed at strengthening production capacities and supply chains.
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