Russian citizens are expected to see almost no real income growth in 2026 and may be forced to sharply limit spending on goods and services, The Moscow Times reports, citing an updated macroeconomic forecast by Russia’s Ministry of Economic Development.
Under the ministry’s baseline scenario, real disposable incomes are expected to grow by just 0.8% this year: three times lower than forecast six months ago and far below last year’s reported 7.4% growth.
In a more conservative scenario, which assumes oil prices drop to $50 and the global economy slows due to the Iran war, income growth could fall to only 0.5%.
The ministry also expects retail turnover growth to slow to 0.8%, compared to 4.1% last year. In the conservative scenario, retail sales are projected to decline by 0.4%, the first drop since 2022.
Economist Dmitry Polevoy says the downgraded forecasts reflect weaker expectations for oil production and exports, as well as the Russian Central Bank’s tight monetary policy.
The ministry now forecasts GDP growth of only 0.4% this year, significantly below previous years. Oil production is expected to hit a 17-year low, while exports could fall 17 million tons below earlier expectations.
Economist Olga Belenkaya of ‘Finam’ says official statistics already show slowing income growth. In the first quarter, incomes rose by 1.5% year-on-year, compared to 5.8% in the previous quarter.
Belenkaya suggests higher VAT and elevated borrowing costs are contributing to weaker consumer sentiment, which has fallen to its lowest level since late 2022.
Economist Andrei Barkhota says Russians have increasingly turned to saving money since mid-2025 as purchasing power weakened.
“The share of food expenditures in the consumer basket has reached 39%, the highest since 2008,” Barkhota says. He notes that rising food prices are pushing consumers toward discount stores and cheaper goods.
