Bad News For Putin

• Sergey Aleksashenko
• 30.08.2026, 20:37

Rosstat's recalculation revealed a reality that is uncomfortable for the Kremlin.

Along with the release of industrial production figures for July—which showed a 0.1% increase for the first seven months of this year compared to the same period last year—Rosstat conducted a retrospective reassessment of industrial trends dating back to 2022. This is due to Rosstat’s transition to a new base year for calculations—2023 instead of 2018—which resulted in a change in the structure of prices and value added in the industrial sector.

The results of the reassessment are likely to greatly displease Vladimir Putin: in fact, growth in Russian industry has come to a halt since the beginning of 2025, and the only factor supporting the formally positive trend is a surprising surge in December 2025.

The July data suggest that the industrial “push-pull” dynamic—growth in military production coupled with a recession or decline in civilian industrial sectors—which had previously ensured an overall positive result, is no longer able to cope with this task. Although the growth in military production continues at an extremely high pace—output of other transportation equipment rose by 22.9% over seven months, finished metal products by 10.9%, computers, electronic, and optical products by 4.2%, and pharmaceuticals by 13.9%—the overall performance of the manufacturing sector turned out to be extremely low, at just 0.5%.

Of course, one could “complain” about the insidious actions of the Ukrainian Armed Forces, which brought oil refining to a standstill (down 9.2% over seven months), but strikes by Ukrainian drones cannot explain the decline in output in the paper industry (down 8.1%), metallurgy (down 6.4%), the production of building materials (down 5.6%), clothing (down 4.5%), machinery and equipment (down 4.1%), wood processing (down 3.9%), and chemical production (down 2.7%). Among all non-military industrial sectors, positive growth rates were recorded in the production of motor vehicles (2%), furniture (1.6%), food (0.7%), tobacco products (0.6%), rubber and plastic products (0.2%).

If we add to this the slow decline in oil production and the unstable situation in coal mining—which led to a slight decline in the extractive industries—it is difficult to see what could drive industrial growth in the last five months of the year.

Sergey Aleksashenko, Substack.com