A flag flies above the headquarters of the Russian Central Bank in Moscow, Russia, September 12, 2025. REUTERS/Ramil Sitdikov

MOSCOW (Reuters) -The International Monetary Fund has downgraded Russia's gross domestic product (GDP) growth forecast for 2025 to 0.6% from 0.9%, below the official government forecast of 1%.

The Russian economy, heavily sanctioned by the West, is set to slow down sharply from 4.3% growth in 2024, primarily due to the high key interest rate set by the central bank to combat inflation.

The key rate is currently at 17%, with some business leaders suggesting that a rate between 12% and 14% is necessary to reignite economic growth.

(Reporting by Gleb Bryanski; editing by Mark Heinrich)