Russia's economy grows 1% in 2025 as sanctions reshape industries and social policies
Russia's economy showed steady but uneven growth in 2025, with GDP rising by 1%. Despite ongoing sanctions since 2022, some industries expanded while others struggled to replace imports. The government focused on defence, social policies, and supporting key sectors through targeted funding.
Unemployment remained at a historic low of 2.2%, reflecting a tight labour market. Meanwhile, the 2025 budget prioritised national security and social welfare, including higher benefits for families and students.
The manufacturing sector grew by 3.6% over the past year, with certain industries outperforming others. Transport engineering saw the most dramatic increase, expanding by nearly one-third. Pharmaceutical production also surged, rising by 15.5% as domestic firms boosted output. By 2025, the country achieved around 80% self-sufficiency in medicines, largely through accelerated local production.
Medical device manufacturing followed a similar trend, with output climbing by 10%. However, not all sectors fared as well. Semiconductor production continued to face severe shortages, forcing reliance on smuggling from China. Government programmes aimed for 50% substitution by 2030, but progress remained slow.
On the social front, the state doubled tax deductions for families with two or more children. Maternity benefits for students were also increased, part of broader efforts to support young parents. Over the past three years, cumulative GDP growth surpassed 10%, though annual expansion in 2025 stayed modest at 1%.
Trade substitution efforts delivered mixed results. Machine building saw partial success through parallel imports and increased domestic production. Yet, critical gaps persisted in high-tech industries, highlighting the challenges of reducing dependency on foreign supplies.
Russia's economy in 2025 demonstrated resilience in some areas while exposing vulnerabilities in others. Strong growth in transport, pharmaceuticals, and medical devices contrasted with persistent struggles in semiconductors. With unemployment at record lows and social benefits expanded, the government's focus on defence and welfare shaped its economic priorities.
The 1% GDP growth marked a cautious step forward, though long-term goals—like semiconductor self-sufficiency—remained out of reach. The coming years will test whether current policies can close these gaps while sustaining broader economic stability.
Read also:
- India's Agriculture Minister Reviews Sector Progress Amid Heavy Rains, Crop Areas Up
- Sleep Maxxing Trends and Tips: New Zealanders Seek Better Rest
- Over 1.7M in Baden-Württemberg at Poverty Risk, Emmendingen's Housing Crisis Urgent
- Cyprus, Kuwait Strengthen Strategic Partnership with Upcoming Ministerial Meeting
