Without new approaches to labor productivity, recent wage gains will be eroded by inflation, leaving workers ultimately no better off, said Andrei Gangan, head of monetary policy at the Central Bank.
The Russian economy is shifting to a phase of “balanced growth” following a period of overheating over the last two years, the Bank of Russia official told Rossiyskaya Gazeta in an interview.
“Today, our economy has effectively maxed out its available production capacity, logistics, and infrastructure, and most critically, it has tapped almost all of our human resources. It is now a challenge to find new workers. The economy is overheating and needs room to breathe; we require new approaches to boost productivity. Without this, all of the recent wage increases will inevitably be ‘eaten up’ by inflation, and working people will end up with nothing to show for it,” he said.
According to Rosstat, Russia’s GDP growth slowed this year: the economy grew by 1.1% in the second quarter of 2025, after expanding by 1.4% in the first quarter.
Russia’s growth potential is a fluctuating estimate of 1–2% that depends in a complex way on multiple factors, explains economist Sergei Khestanov, an Associate Professor at RANEPA. Any growth above this potential leads to overheating and inflation and must be cooled down.
“Anti-inflationary policies naturally limit economic growth. For developing economies, growth below 3% de facto means stagnation,” the expert emphasized.