Russia Economy Grows 0.9 Percent Amid Ukrainian Drone Strikes

The Russian economy grew by 0.9 percent in the second quarter of 2026, rebounding from a contraction earlier in the year. This growth was primarily fueled by a 39 percent increase in government procurement spending during the first seven months of the year, alongside double-digit wage growth that increased consumer demand.

Vladimir Putin has characterized current fuel market problems as temporary, though the recovery faces threats from Ukrainian drone attacks targeting logistics networks, production sites, and oil refineries. These strikes have caused fuel shortages and contributed to inflation, which is expected to exceed 6 percent as of late July.

In response to these disruptions and declining production capacity, the Central Bank of the Russian Federation lowered its full-year growth forecast to between 0 percent and 1 percent. The bank's leadership has also pushed back the timeline for reaching its 4 percent inflation target due to the risk of further refinery outages.