Russia’s economy is on the verge of a recession, Economy Minister Maxim Reshetnikov warned on Thursday during the St. Petersburg International Economic Forum, according to Russian media reports.
“The numbers indicate cooling,” Reshetnikov said, likening current data to a “rearview mirror.” He added, “Judging by how businesses currently feel and the indicators, we are already, it seems to me, on the brink of going into a recession.”
Despite exceeding forecasts in the aftermath of sanctions imposed after the 2022 invasion of Ukraine, Russia’s economy now faces mounting challenges. High defense spending has kept growth afloat and unemployment low, but rising inflation and shrinking foreign investment continue to pose long-term risks.
Economists have warned of stagnation, with military-related sectors receiving the bulk of investment. Reshetnikov noted the future path depends on government decisions, saying, “Going forward, it all depends on our decisions.”
However, other top officials struck a more optimistic tone. Finance Minister Anton Siluanov acknowledged the economic “cooling,” but said, “after any cooling, the summer always comes.” Central Bank Governor Elvira Nabiullina suggested the economy is merely “coming out of overheating.”
Meanwhile, Deputy Economy Minister Vladimir Ilyichev said Russia expects potential export losses of \$9 billion due to global trade shifts but is optimistic about expanding trade with China. He estimated the broader impact of global reorientation on Russia at \$33 billion.
“The numbers indicate cooling,” Reshetnikov said, likening current data to a “rearview mirror.” He added, “Judging by how businesses currently feel and the indicators, we are already, it seems to me, on the brink of going into a recession.”
Despite exceeding forecasts in the aftermath of sanctions imposed after the 2022 invasion of Ukraine, Russia’s economy now faces mounting challenges. High defense spending has kept growth afloat and unemployment low, but rising inflation and shrinking foreign investment continue to pose long-term risks.
Economists have warned of stagnation, with military-related sectors receiving the bulk of investment. Reshetnikov noted the future path depends on government decisions, saying, “Going forward, it all depends on our decisions.”
However, other top officials struck a more optimistic tone. Finance Minister Anton Siluanov acknowledged the economic “cooling,” but said, “after any cooling, the summer always comes.” Central Bank Governor Elvira Nabiullina suggested the economy is merely “coming out of overheating.”
Meanwhile, Deputy Economy Minister Vladimir Ilyichev said Russia expects potential export losses of \$9 billion due to global trade shifts but is optimistic about expanding trade with China. He estimated the broader impact of global reorientation on Russia at \$33 billion.
