Russia Economy Nears Recession Amid Worst Harvest, Energy Revenue Drop

Russia's economy is facing a severe crisis driven by multiple factors including war expenditures, declining energy revenues, a disastrous agricultural harvest, and targeted Ukrainian strikes on fuel infrastructure. Economists such as Tatiana Orlova of Oxford Economics warn that Russia is on the brink of a recession, with GDP growth expected to plummet from 4.3% in 2024 to 1.2% in 2025 and stagnate thereafter, while domestic officials acknowledge the looming economic downturn. The country’s energy sector, traditionally a strong pillar, is weakening due to Ukrainian attacks on refineries primarily located west of the Ural Mountains, disrupting fuel supplies and straining transport logistics. Russia’s worst harvest in 17 years, impacted by spring frosts, heat, and drought, further exacerbates economic fragility, exposing structural weaknesses in its war-dependent economy. Despite efforts by President Vladimir Putin to delay further U.S. sanctions, including a recent meeting with President Donald Trump, no progress has been made on easing existing sanctions or improving economic conditions. High interest rates have raised concerns over a potential debt crisis, with the central bank recently cutting rates to stimulate growth, though the overall outlook remains bleak amid ongoing geopolitical and economic challenges.