Russian regional economy shows mixed trends, business activity slows
The Bank of Russia's latest report on regional economies indicates a slowdown in business activity across Russian macroregions in January-February 2026. The analysis highlights mixed dynamics across sectors and a moderation in consumption.
Slowing Momentum in Regional Business Activity
In January–February 2026, growth in business activity slowed down, with consumption dynamics more moderate than at the end of 2025, particularly for non-food goods.
Price growth rates, which increased in January due to one-off factors like VAT, car recycling fees, and regulated tariffs, declined in February.
Businesses' short-term price expectations also decreased considerably in February after rising in previous months.
The expansion of retail lending was primarily driven by mortgages, influenced by anticipated changes in subsidised lending conditions, though disbursements under the Family Mortgage programme went down in February.
Corporate lending also saw a slowdown in expansion.
Despite lower deposit rates, households' funds with banks continued to increase, indicating a complex financial landscape.
Economic activity showed mixed dynamics across various sectors and macroregions, reflecting diverse local factors.
Regional Divergence and Sectoral Shifts
The report highlights significant divergence in economic performance across Russia's macroregions.
Car manufacturing saw a rebound in Volga-Vyatka, with enterprises expanding product ranges and increasing localization.
In the Urals, new warehouses and logistics centers contributed to growth in non-residential real estate.
However, coal production in Siberia decreased due to cooling external demand, which also led to a drop in cargo turnover at Far Eastern seaports.
Clothing and footwear manufacturers in Central Russia reported lower output and stronger competition.
The report's unique qualitative analysis method, based on surveys of over 15,000 non-financial companies and expert opinions, combines official statistics with business estimates to capture these nuanced regional trends and inform monetary policy decisions.
Navigating a Fragmented Recovery
This report provides crucial granular detail for the Bank of Russia, revealing a highly fragmented economic landscape that complicates monetary policy calibration.
The stark regional divergences mean that a single policy rate will inevitably have uneven impacts across the country.
Ultimately, the findings underscore the persistent challenge of balancing inflation control with supporting varied and localized growth dynamics.