Russia's economy: Rapid decline in activity and drifting into a recession

Subject. This article discusses the impact of the Bank of Russia's tight monetary policy on the country's economy. Objectives. The article aims to determine the impact of a tight monetary policy and the prolonged maintenance of a high key interest rate by the Bank of Russia on the real sector of the economy, investment, and consumer demand. Methods. For the study, we used the methods of scientific and information analysis, along with synthesis and grouping. Results. The article finds that the strict monetary policy of the Bank of Russia slows the inflow of investment into the real sector of the economy, worsens business lending, thereby blocking the opportunities for economic development, and in fact, there are no possibilities for expanded reproduction. Since the beginning of 2025 (for 9 months), there has been a rapid decline in the production volumes of the civil manufacturing sectors. Russia's economy has now entered stagnation. Conclusions. The Russian economy urgently needs a revival; to achieve this, it is necessary to lower the key interest rate to the level of expected inflation in 2025, i.e. 6.8%, not raise taxes until 2030, and select import substitution priorities to ensure Russia's technological sovereignty. It is necessary to build a system that encourages businesses to modernize, automate, and robotize their companies using artificial intelligence, and engage through joint public-private partnership projects.