Kirill Chernovol, Researcher at the Gaidar Institute’s International Best Practices Analysis Department, explained why Russia’s economic growth can coexist with a decline in rail freight volumes.
According to the expert, these indicators reflect different aspects of economic activity and are not inherently contradictory.
“GDP demonstrates the value added generated within the country, while rail freight volume reflects the physical volume of goods transported. Therefore, growth in trade, food services, IT, financial services, and other services can significantly increase GDP while having virtually no impact on freight volumes. There is no direct contradiction here: the structure of economic growth is no less important than its overall rate,” noted Kirill Chernovol.
According to Rosstat’s estimates, in Q2 2026, Russian GDP grew by 1.3% y/y after a 0.2% decline in Q1. The expert considers domestic demand to be one of the main drivers of growth. In Q2, retail sales increased by 7.2%, food service revenue by 6.2%, and manufacturing output by 2%. Moreover, real wages rose by 7.2% in January–May.
Another important source of growth remains the high capacity utilization in the defense- industrial complex. However, according to Kirill Chernovol, it would be incorrect to attribute all industrial growth solely to the defense-industrial complex: the dynamics of individual sectors vary significantly.
“We see a rather mixed picture. Businesses continue to hold more cautious expectations in mining, heavy industry, the oil and gas sector, chemicals, energy, and transportation. At the same time, companies are more optimistic about the prospects for IT, retail, consumer goods manufacturing, and healthcare. This once again shows that it is not enough to discuss the economy based on just one indicator—such as GDP or freight traffic,” the expert emphasized.
That said, he noted that the situation with rail freight should be assessed more accurately by taking recent months into account. From January through July, freight volume on the Russian Railways network fell by 0.8% y/y to 641.1 mn tons, while rail freight turnover rose by 0.3%. Loading has been growing for four consecutive months, from April through July, and freight turnover increased by 6.5% in July.
“Therefore, it would not be entirely accurate to simply speak of a decline in freight transportation. Rather, we are seeing a gradual improvement in the trend. It is also important to take into account changes in the direction of freight flows: the increase in transport distances and the reorientation of flows toward the east are supporting growth in freight turnover even with loading volumes close to last year’s levels,” summarized Kirill Chernovol.