Russia’s economic expansion is projected to slow to 1.5% in 2025, according to Finance Minister Anton Siluanov, who informed President Vladimir Putin that the figure falls well short of the previously anticipated 2.5%. This deceleration is attributed to elevated interest rates implemented to curb inflation, which have significantly dampened borrowing activity. At the Eastern Economic Forum in Vladivostok, Sberbank CEO Herman Gref emphasized that even a planned reduction in rates from 18% to 14% by the end of the year may not be sufficient to stimulate growth. He cautioned that the current phase of deliberate economic slowdown risks turning into prolonged stagnation, which would be harder to reverse than the initial cooling. Gref stated that a recovery is unlikely unless rates drop to around 12% or below, highlighting the narrow window for effective monetary policy intervention. The Central Bank is scheduled to review its interest rate stance on September 12.
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Sberbank says Russian economy is stagnating, warns of recession if rates stay high
Finance Minister Anton Siluanov told President Vladimir Putin last week that Russia ‘s economic growth is expected to slow to 1.5% in 2025, far below the earlier 2.5% forecast, as high interest rates imposed to reduce inflation have stifled borrowing. n nSign up here. n nSpeaking to reporters on the sidelines of the Eastern Economic Forum in the city of Vladivostok, Sberbank CEO Gref also said that the expected rate cuts to 14% by year-end from the current 18% were not enough to revive the economy. n n”It is important to move out of this period of controlled cooling of the economy so that it does not turn into stagnation, because reviving the economy will be much more difficult than cooling it down,” he said. n n”At current inflation levels, the rate at which we can hope for economic recovery is 12% or lower. So somewhere around these levels, we will most likely see economic recovery.” n nCentral bank will hold a rate-setting meeting on September 12. n nReporting by Olesya Astakhova and Darya Korsunskaya; Writing by Vladimir Soldatkin; Editing by Jamie Freed and Sonali Paul