Moscow Government approves social and economic forecast for 2025–2027

The Presidium of the Moscow Government has reviewed and approved the capital’s social and economic forecast for 2025–2027, which reflects a comprehensive assessment of key factors and the city’s performance indicators in today’s context, both internal and external. The document takes into account the existing global, Russian and Moscow economic situations, including in the labor market, forecasts of the Russian Ministry of Economic Development, monetary policy and assessments of the Bank of Russia, as well as local mid-term development plans.

In 2022, when Russia found itself under unprecedented sanctions, Moscow's economy continued to grow (+ 0.6 per cent). Moreover, in 2023–2024, the city achieved stable GRP growth rate at 4 per cent,

the positive trend proving stability of the capital’s economy and its ability to adapt to unfavorable external circumstances. That, in turn, was ensured by the accelerated growth of infrastructure, stimulation of investment, creation of employment opportunities, and a good urban environment.

In 2023–2024, the key drivers remained both the real sector (i.e., IT, telecommunications, and manufacturing industry) and consumer demand (retail, catering, and paid services).

In particular, the turnover of IT and telecommunications companies has tripled over five years (2019—2023), including by 23.2 per cent in 2023, while the number of employees has increased by 126,600 people (34.7 per cent).

Professional, scientific and technological activities grew outpacing the general economic growth, as the sector’s turnover has doubled in five years.

By the end of the year, manufacturing outputs are expected to grow by 14 per cent; their further growth is forecast at 10 per cent in 2025 and 7.5 per cent of annual growth in 2026–2027.

Consumer demand continues to rapidly increase, and its role in supporting overall economic growth will continue in the medium term. By the end of 2024, retail turnover and paid services will increase by 5.2 per cent and 7 per cent year-on-year, respectively. In 2025–2027, retail and paid services are expected to grow by 2.5 to 3 per cent and 4 to 5 per cent, respectively.

High investment activity has been a constant driver Moscow’s economic growth in recent years. By the end of 2023, according to preliminary data, investment in fixed assets increased by 3.8 per cent in comparable prices, reaching RUB 6.8 trillion, the investments getting more and more diversified across the sectors. Investment in intellectual property (i.e., software and databases, R&D, design and engineering, etc.) are growing steadily, too, as the share of that type of investments, according to data for 2023, amounting to 16.5 per cent (vs. approx. 10 per cent in 2019).

Despite the tough monetary policy, investment will remain in the upward trend. In 2025–2027, investment in the urban economy is expected to grow by 4–4.8 per cent every year.

Investment activity will be supported by domestic demand from the growing economy, further import substitution and a stimulating budget policy.

In light of the economic dynamics, the growth of Moscow's GRP by the end of 2024 will be no less than 4 per cent, while in 2025–2027 the city’s annual economic growth rate is expected to be in the range of 2.7 to 3 per cent.

In the context of continuing economic growth, Moscow’s economy is experiencing a serious additional need (shortage) for personnel, as it currently needs 500,000 people and will need 781,000 in 2027. Today, this is a key challenge for the city’s economic development; an adequate response requires higher labor productivity and more extensive staff training and retraining efforts.

Inflation is projected at 9 per cent by the end of 2024, whereas in the medium term the growth rate of consumer prices is expected to slow down.