Russia's economy minister warns that the country is on the brink of recession
Russia's economy is teetering on the edge of recession, the country's economy minister has warned, according to reports from Russian media.
Maxim Reshetnikov delivered the stark assessment on Thursday at the St. Petersburg International Economic Forum, an annual event typically used to showcase Russia's economic strength and attract foreign investment. He stated that the economy was "on the brink of going into a recession."
Russian business news outlet RBC quoted the official as saying 'the numbers indicate cooling, but all our numbers are (like) a rearview mirror. Judging by the way businesses currently feel and the indicators, we are already, it seems to me, on the brink of going into a recession.'
Russia's economy, hit with a slew of sanctions after the Kremlin sent troops into Ukraine in February 2022, has so far outperformed predictions. High defense spending has propelled growth and kept unemployment low despite fueling inflation. At the same time, wages have gone up to keep pace with inflation, leaving many workers better off.
Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine also have put more income into the country's poorer regions. But over the long term, inflation and a lack of foreign investments remain threats to the economy, leaving a question mark over how long the militarized economy can keep going.
Economists have warned of mounting pressure on the economy and the likelihood it would stagnate due to lack of investment in sectors other than the military.
Speaking at one of the sessions of the forum in St. Petersburg, Reshetnikov said Russia was 'on the brink,' and whether the country would slide into a recession or not depends on the government's actions.
'Going forward, it all depends on our decisions," Reshetnikov said, according to RBC.
RBC reported Russia's Finance Minister Anton Siluanov and Central Bank Gov. Elvira Nabiullina gave more optimistic assessments.
Siluanov spoke about the economy 'cooling' but noted that after any cooling 'the summer always comes," RBC reported.
Nabiullina said Russia's economy was merely 'coming out of overheating," according to RBC.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South Wales Guardian
31 minutes ago
- South Wales Guardian
Putin boasts about Russia's economy despite recession fears
His optimistic account in a speech at the St Petersburg International Economic Forum contrasted with sombre statements by some members of his government, who warned at the same conference that Russia could face a recession. Economic Minister Maxim Reshetnikov had said that the country is 'on the brink of going into a recession'. Mr Putin mentioned the recession warnings, but emphasised that 'it mustn't be allowed'. He pointed out that manufacturing industries have posted steady growth, allowing the country to reduce its reliance on oil and gas exports. 'The perception of Russian economy as based on raw materials and dependent on hydrocarbons exports have clearly become outdated,' Mr Putin said, adding that the economy grew by 1.5% in the first four months of 2025 and inflation has dropped from double digits to 9.6%. Mr Putin has used the annual forum to highlight Russia's economic prowess and encourage foreign investment, but Western executives have shunned it after Moscow sent troops into Ukraine in 2022, leaving it to business leaders from Asia, Africa and Latin America. The economy, hit with a slew of Western sanctions, has so far outperformed predictions. High defence spending has propelled growth and kept unemployment low despite fuelling inflation. Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine also have put more income into the country's poorer regions. But over the long term, inflation and a lack of foreign investments pose threats to the economy. Economists have warned of mounting pressure on the economy and the likelihood it would stagnate due to lack of investment in sectors other than the military. Mr Putin said the growth of military industries helped develop new technologies that have become available to the civilian sector. He vowed to continue military modernisation, relying on lessons learned during the fighting in Ukraine. 'We will raise the capability of the Russian armed forces, modernize military infrastructure and equip the troops with cutting-edge equipment,' Mr Putin said.
Reuters
2 hours ago
- Reuters
US leading indicators slip in May, triggering recession signal, Conference Board says
June 20 (Reuters) - A measure of future U.S. economic activity fell in May for the sixth straight month and triggered a recession signal, held down by consumer pessimism, weak new orders for manufactured goods, an uptick in jobless benefits claims and a drop in building permit applications. The Conference Board's Leading Economic Index fell by 0.1% to 99.0 last month after a downwardly revised 1.4% drop in April, which was the largest decline in the index since the spring of 2020 at the start of the COVID-19 pandemic. The decline matched the consensus expectation among economists polled by Reuters. A rebound in stock prices in May following a series of temporary roll backs in President Donald Trump's wave of tariffs was the main positive contributor to the index, the Conference Board's senior manager for business cycle indicators, Justyna Zabinska-La Monica, said in a statement. But that was slightly outweighed by those other factors. "With the substantial negatively revised drop in April and the further downtick in May, the six-month growth rate of the Index has become more negative, triggering the recession signal," she said. "The Conference Board does not anticipate recession, but we do expect a significant slowdown in economic growth in 2025 compared to 2024, with real GDP growing at 1.6% this year and persistent tariff effects potentially leading to further deceleration in 2026." The Leading Index had signaled a recession a few years ago during the peak of the inflation wave that followed the pandemic, but the economy never slid into contraction.
Reuters
2 hours ago
- Reuters
Putin says no need for OPEC+ to intervene in oil market due to Iran-Israel conflict
ST PETERSBURG, Russia, June 20 (Reuters) - Russian President Vladimir Putin said on Friday that oil prices had not risen significantly due to the conflict between Iran and Israel, and that there was no need for the OPEC+ group of oil producers to intervene in oil markets. Oil prices have rallied as a week-old air war between Israel and Iran escalated and uncertainty about potential U.S. involvement kept investors on edge, with Brent crude futures touching their highest since late January. Putin said the price of oil now stands at around $75 per barrel, while before the conflict escalated it stood at $65. "Of course, we see that the current situation in the Middle East, the current situation related to the conflict between Iran and Israel, has led to a certain increase in prices. But this increase, in the opinion of our experts, is not significant," Putin told the St Petersburg Economic Forum. Iran is the third largest producer among members of the Organization of the Petroleum Exporting Countries. Hostilities could disrupt its supply of oil and thereby increase prices. Putin also said OPEC and allies including Russia - a group known as OPEC+, which pumps about half of the world's oil - were increasing oil output, but doing so gradually, to ensure balance in the oil market and "comfortable" prices. "We will all see together how the situation unfolds. So far no immediate response is required," he said.
