Russia's economic engine, fueled by massive military spending, has begun to sputter. In November 2025, GDP growth slowed to a critical 0.1%, effectively signaling economic stagnation.

This was reported by the Center for Countering Disinformation (CCD), citing official data from Russia's Ministry of Economic Development.

The End of the "Military Miracle"

The 0.1% figure represents the worst performance since early 2023. However, the most alarming signal for the Kremlin is the 0.7% drop in industrial production—the first time this sector has entered negative territory in nine months.

This downturn shatters the myth of the defense industry’s bottomless resources. Manufacturing was the primary driver of so-called "military growth" throughout 2023–2024. Now, that engine has stalled.

Three Collapsed Pillars

Even analysts loyal to the Russian authorities admit that the war-oriented economic model has exhausted itself. It relied on three pillars that are no longer functional:

  • Budget Injections: Treasury funds are running dry.

  • Import Substitution: Reaching a technological dead end.

  • Forced Lending: High interest rates have stifled business.

2026 Forecast: Recession Inevitable

Experts are noting a sharp increase in recession risks for the coming year. Russian authorities continue their aggression out of inertia, ignoring the fact that the economic base required to sustain such high-intensity warfare is no longer sufficient.

The "Nabiullina Trap" and the Diagnosis of Stagflation

The combination of negligible GDP growth (0.1%), high inflation, and falling industrial output has a specific economic term: stagflation. This is a nightmare scenario for any government because standard remedies fail: printing money to stimulate production causes inflation to skyrocket, while tightening the money supply grinds industry to a final halt. Russia has entered this spiral due to the exhaustion of Soviet-era stockpiles and a severe labor shortage.

The Central Bank’s key interest rate, which hit prohibitive levels of 25% in 2025, played a decisive role in the 0.7% industrial decline. Loans have become inaccessible for civilian businesses. Only defense plants survive, receiving direct budget funding independent of bank rates. Meanwhile, the civilian sector—including construction, automotive, and food industries—is effectively cut off from capital.

The industrial contraction is also a consequence of tightened secondary sanctions. Throughout 2025, Chinese and Turkish banks frequently refused to process payments for machinery and components, fearing U.S. sanctions. Without Western or Chinese spare parts, import substitution has proven a fiction: machinery is breaking down, and there are no means to repair it.