Translation. Region: Russian Federation –
Source: United Nations – United Nations –
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January 8, 2026 Economic development
Economic growth in the post-Soviet countries will decline to 2.1 percent in 2026, compared to 2.2 percent in 2025, according to a new UN report.
Average GDP growth rates in the region slowed in 2025, primarily due to a slowdown in the Russian Federation. In contrast, most countries in the Caucasus and Central Asia maintained strong momentum, and this trend is expected to continue in 2026. The limited dependence of post-Soviet economies on the US market significantly reduces the impact of high US tariffs.
Low growth in Russia
The Russian Federation's economy is projected to grow by 1.0 percent in 2026, up from 0.8 percent in 2025. While moderate monetary easing is expected to have a positive impact on economic activity, growth is likely to be constrained by labor shortages, weakening private consumption, and fiscal tightening.
The country remains under sanctions, primarily targeting oil exports and restricting access to high-tech imports.
Ukraine's GDP will grow by 2.3 percent
Ukraine's economy faces significant challenges in 2025 amid military conflict and repeated disruptions to the country's energy infrastructure, which have led to a decline in electricity generation capacity. GDP growth is projected at 2.3 percent in 2026, down from an estimated 1.5 percent in 2026.
However, the outlook for Ukraine remains unclear due to uncertainty about the trajectory of the war and the timing and scale of reconstruction efforts.
Caucasus and Central Asia: Positive Dynamics
For the countries of the Caucasus and Central Asia, the impact of their use as hubs for trade with the Russian Federation is gradually diminishing. However, most countries in the subregion continue to experience robust growth, supported by strong domestic demand.
Key factors behind the positive dynamics include robust private consumption, supported by rising real incomes and declining unemployment, a stable inflow of remittances, and rapid growth in household lending. Public investment, including regional infrastructure projects, also contributed to economic growth.
Inflation is accelerating
The report notes that inflation has accelerated in many CIS countries, driven by a combination of general factors such as rising food prices and large-scale budget spending, as well as country-specific factors.
Globally, policymakers are facing a more challenging inflation environment, driven in particular by climate-related disruptions. While monetary policy remains the central tool in the fight against inflation, it must be complemented by robust fiscal and social measures and policies that strengthen productive capacity and supply chains.
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