• Russian officials and business leaders met this week at an economic forum.
• Some have warned of slowing growth and delays in investment in 2025, blaming a lack of financing.
• Russia’s main interest rate is 21% and could be increased further.

The Russian economy looks set to be strewn with pitfalls next year.

Officials and business leaders shared a pessimistic economic outlook for 2025 at the Russian Economic Forum, held this week in Chelyabinsk, central Russia.

Some predict weaker-than-expected growth and investment delays, blaming interest rate hikes by Russia’s Central Bank and a lack of public financing.

Andrei Klepach, chief economist at state development entity VEB.RF, predicted that economic growth would increase from around 2.5% to around 2% in 2025. These figures represent a best-case scenario.

He also lowered Russia’s fixed capital investment growth from 1.9% to 1%, blaming the central bank’s policy rate.

The central bank raised its rate at the end of October from 19% to record by 21%, citing the need to control inflation.

Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, said high interest rates were forcing companies to delay launching investments until after 2025.

Shokhin also said a growing number of businesses were having difficulty accessing funds and called on Russia to step up support measures, including preferential loans at fixed rates.

In August, Russian Prime Minister Mikhail Mishustin said that the state has allocated almost 2.5 billion rubles, or approximately $25.6 million, for preferential loans for businesses. Some, he said, would benefit from a subsidized interest rate of 1 to 5 percent.

Speaking at the economic forum on Friday, Russian Deputy Prime Minister Alexander Novak said high interest rates slowed investment activity from 10% in the first half to 7.8% expected for the full year.

“We may see some decline in investment activity amid high policy rates,” he said.

Since the start of its full-scale invasion of Ukraine in 2022, Russia has repeatedly increased its defense budget to support its army, while fighting against Western sanctions.

Inflation soared, triggering rate hikes that sparked complaints at the economic forum.

In a report Published on Wednesday, the Central Bank of Russia said it may raise its key rate again at its next meeting in December.

Speaking on the sidelines of the Russian Economic Forum on Thursday, Kirill Tremasov, advisor to the central bank governor, said the Russian media Interfax that he expects an increase of at least one percentage point.

“One percentage point is currently the lowest possible step,” he said.