ST PETERSBURG, Russia, June 19 (Reuters) – Russia’s Economy Minister, Maxim Reshetnikov, has warned that the country’s economy is at risk of falling into a recession unless monetary policy changes are implemented. Speaking at the St Petersburg International Economic Forum, Reshetnikov emphasized that the current high interest rate of 20% is hindering economic growth. Although Russia recently cut interest rates for the first time since 2022, borrowing costs remain near record levels, discouraging investment. The central bank has maintained high rates to control inflation in an economy heavily focused on military needs due to the conflict in Ukraine. Reshetnikov noted that while economic indicators show a slowdown, the situation is not yet irreversible. He urged for more supportive monetary policies to prevent a potential recession. President Vladimir Putin has previously cautioned against excessive economic restrictions, likening high borrowing costs to placing the economy in a “cryotherapy chamber.” Analysts suggest that many civilian sectors are already in recession, with little hope for immediate growth. Central Bank Governor Elvira Nabiullina described the current GDP slowdown as a necessary step out of economic overheating.
— new from Reuters
