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Russia’s central bank has slashed its economic growth forecast for 2026, now projecting gross domestic product to expand by only 0.0 to 1.0 percent, down sharply from earlier estimates. Governor Elvira Nabiullina said the bank also expects inflation to accelerate faster than previously anticipated.

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Nabiullina said inflation would accelerate much faster than expected … complicating the bank’s policy balancing act.

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The revised outlook comes as a fuel crisis pushes up prices across the Russian economy, affecting a broad range of goods and services beyond energy alone. Nabiullina pointed to the fuel shortages as a key driver behind the deteriorating price outlook.

The near-stagnant growth forecast underscores the mounting strain on Russia’s wartime economy, which has relied heavily on military spending to offset weakness elsewhere. Persistent inflation pressure could complicate the central bank’s efforts to balance price stability with continued economic support.

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