Russian Economy Minister Maxim Reshetnikov has expressed concerns that Russia is nearing a recession during the St Petersburg economic forum. He highlighted that current business sentiment and indicators suggest an economic slowdown. Reshetnikov urged the central bank to adopt a more supportive stance towards the economy. In October 2024, Russia’s central bank had raised interest rates to 21% to tackle inflation, only slightly reducing them to 20% this month. Economic growth in Russia slowed to 1.4% year-on-year in the first quarter of 2025, marking the lowest rate in two years. Rising prices have been attributed to significant government spending on the war and labor shortages. Annual inflation has exceeded the central bank’s 4% target for over a year. Economists argue that growth driven by the defense sector is unsustainable without real productivity improvements.
— news from The Guardian
— News Original —
Ukraine war briefing: Russia ‘on verge of recession’, Putin minister tells economic showcase
Vladimir Putin’s economy minister has warned that Russia is “on the verge” of recession as he spoke on the second day of a signature event meant to bolster economic confidence. The minister, Maxim Reshetnikov, said at the St Petersburg economic forum that his view was based on “current business sentiment and indicators” pointing to a slowdown. “Everything else depends on our decisions,” Reshetnikov said, calling for the central bank to show a “little love for the economy”.
Russia’s central bank raised interest rates to an eye-watering 21% in October 2024 to combat inflation and kept them at that level until this month when it eased them to 20%. Russia’s economic growth slowed to 1.4% year-on-year in the first quarter of 2025, the lowest quarterly figure in two years. Prices are rising across the economy driven up by massive government spending on the war and widespread labour shortages. Annual inflation has been more than double the central bank’s 4% target for over a year. Economists have warned since the war began that any Russian growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity.