Russia “is about to go into stagnation,” warns the Minister of Economy – my country

Russia On Thursday, the Minister of Economy Maxim Richenikov warned the economy that the economy is about to slip into the recession, and it will now determine monetary policy decisions whether it falls into one or not.

Reshetnikov has delivered the increasing message at the annual Economic Forum of Russia in the northern Russian city of Saint Petersburg, an event sometimes called “The Russian Davos”, which aims to enhance investment in the Russian economy.

The Central Bank urged the economy to support when it came to monetary policy because the Kremlin said that the current main interest rate – of 20 % – was putting a break on the economy even though this was a conscious decision.

Russia has reduced interest rates this month for the first time since 2022, but borrowing costs are still close to record levels, and companies have complained for several months of the high investment prices.

The central bank has kept high rates to reduce inflation in the feverish economy, which focuses on military fighting needs in Ukraine.

“According to the numbers, there is a cooling, but all of our numbers are in the rear vision mirror,” said Rethnikov at a committee at the St. Petersburg International Economic Forum.

“According to the current feelings of companies and business indicators, we seem to me, I am about to go to recession.

Reshetnikov explained that the recession was not inevitable, and later reported that avoiding an individual depends on politics, above all on interest rates.

He said: “I did not expect a stagnation. I said that we are on the brink of the abyss.

In addition to maintaining confidence in the goal of inflation in Russia by 4 %, Reshetnikov said it supports “giving the economy some love”, and he addresses the central bank ruler Elvira Nabiolina, who was in the same painting.

In March, President Vladimir Putin urged his economic responsibilities not to freeze the Russian economy as if it were in the “cooling room” with the high borrowing costs, and Rethnikov had previously warned of the risk of “low body temperature.”

At the present time, the expectations do not seem promising.

This week, most of the civil sectors are in stagnation and there is no sign of what economic growth can begin.

“The recession economy” may be formed.

In Thursday’s session, the central bank ruler Nebuluina said that the current slowdown in GDP growth was “a way out of the high temperature.” Finance Minister Anton Selwanov said there is a cooling in Russia, but “summer always follows the cold surprise.”

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Alexander Fedyun, the first chief executive of the largest lender in Russia, Spearbank, said in an interview with Reuters this week that narrow monetary policy created excessive cooling risk and said that interest rates are much lower than 12 to 14 % were necessary to restart the investment.

The economy, which struck a large number of sanctions after sending the Kremlin to Ukraine in February 2022, outperformed predictions. High -growth defensive spending has pushed low unemployment despite inflation in fueling. At the same time, wages have risen to keep up with inflation, making many workers better.

The large recruitment bonuses for military recruitment and the benefits of death for those who killed in Ukraine have also put more income in the poorest areas in the country. But in the long run, inflation and a lack of foreign investment remains threats to the economy, leaving a question mark about the period in which the military economy can continue.

Economists have warned against pressure on the economy and the possibility of its passenger due to a lack of investment in sectors other than the army.

(I participated in Reuters reports in Saint Petersburg, Daraya Corsensaya in London and Elena Fabrichnaya in Moscow; written by Alexander Maru; edited by Andrew Osborn and Tobi Chopra)

– Additional files from Associated Press

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