MOSCOW (Reuters)

The Russian central bank on Wednesday forecast gross domestic product (GDP) growth of 2-3% in the fourth quarter of this year, down from 3.2% in the third quarter.

Russia's economy contracted in 2022, and its current growth relies heavily on large-scale government spending on arms production, as Moscow continues to fund the conflict in Ukraine. The central bank has warned that the economy is overheating.

On October 25, the central bank hiked its key interest rate by 200 basis points to 21%, marking the highest level since the early years of President Vladimir Putin's rule, a period characterized by recovery from the chaos following the collapse of the Soviet Union.