Russia’s economic downturn will become clear by October, economist predicts

Independent Russian economist Vyacheslav Shiryaev told NV that third-quarter data due in October will expose a genuine economic downturn, as Ukrainian strikes on marketplace warehouses and fuel shortages cut into the consumer spending that has propped up official statistics. He notes military procurement rose 36.2% in the first eight months of the year while civilian production, like mainline freight railcars, fell 30.7%.

Shiryaev expects Russia's central bank to face a bind between raising rates to fight inflation and cutting them to support a contracting economy, after the bank held its key rate at 14% on September 11 despite what he estimates is a real need closer to 20-21%. Russia's budget deficit has already reached 5.8 trillion rubles through August against a full-year target of 3.8 trillion, and Shiryaev projects the real 2026 shortfall could exceed 10 trillion rubles once the government submits its next budget.

He also flagged the semantic dodge in official Russian commentary, where the downturn is being described as 'overcooling' rather than acknowledged as contraction outright.

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