Russia's annual consumer price growth will slow to 5.7-5.8% by the end of 2025, with the possibility of reaching 5.6%, President Vladimir Putin stated during his combined press conference and "Direct Line" on December 19, Lenta.ru reported.

Putin met with Russian citizens for four-and-a-half hours, answering questions on the country’s collapsing birth rate, significant death toll from the country’s ongoing war in the Ukraine, while also facing widows complaining they hadn’t received their dead husband’s pensions. The programme aimed at reassuring the country, appeared to put the usually cool president at moments of surprise including the first question which was “when will there be peace.”

The country's economy continues to grow, with gross domestic product expected to increase 1% in 2025. Cumulative GDP growth over the past three years will reach 9.7%, according to the president.

The labour market situation remains positive. The unemployment rate has fallen to 2.2%, a historic low since observations began.

Russians' real incomes increased 4.5% over the year. However, wage growth is outpacing labour productivity growth, which reached only 1.1%.

In the construction sector, residential housing commissioned in 2025 will total between 103mn and 105mn square metres.

The inflation figure represents a significant decline from previous months. Russia's Central Bank reported inflation at 5.8% as of December 15, with the target to bring it below 6% by year-end and achieve sustainable 4% inflation in the second half of 2026.

The Central Bank of Russia (CBR) resolved to cut the key interest rate by 50 basis points (bp) to 16% at the policy board meeting on December 19, according to the regulator's press release, earlier in the day, bne Intellinews previously reported.

A cautious key interest rate cut was largely expected, as the CBR managed to keep inflation to almost 6% by the end of 2025, but remained cautious on the fiscal framework that relies on hiking taxes and the VAT as of 2026.

The CBR has cut key interest rate by 50bp at the previous meeting of October 24. The Governor of the CBR Elvira Nabiullina launched an unorthodox policy to artificially slow growth using non-monetary policy methods. That has allowed the regulator to implement 450bp of rate cuts this year, bringing the total to 500bp with the latest cut.

As a reminder, inflation slowed to 6.6% year-on-year (y/y) in November and further to 6.3% y/y by December 8. Latest weekly inflationary data indicated that inflation might well slip under 6% by the end of 2025, well below the CBR’s October guidance of 6.5%–7%. 

The CBR itself estimated that “as of December 15, annual inflation was estimated at 5.8% and is expected to end 2025 below 6%”.