Latest news with #Raiffeisenbank
Yahoo
17-05-2025
- Business
- Yahoo
Russian economic growth slowing down, Rosstat reports
Russia's economy is experiencing a sharp slowdown in growth, according to a report released by the governmental statistics agency Rosstat on May 16. Gross domestic product (GDP) only grew by 1.4% in the first quarter of 2025 – a notable decline from 4.5% growth in the previous quarter and 5.4% in the same period last year, the reported, citing Rosstat data. The latest data from Rosstat came in below expectations: the Russian Economic Development Ministry estimated GDP growth at 1.7% and Bloomberg analysts predicted 1.8% growth. According to Egor Susin, an executive from Gazprombank (the third largest bank in Russia, currently under ), Rosstat's data show a "sharp slowdown in the economy." Compared to last quarter, the economy has already contracted 0.4% – the first such decline since 2022, according to Raiffeisenbank. Other analysts point to Central Bank policies, sanctions, supply difficulties, and high inflation as reasons for the economy's decline. Moreover, "the situation is complicated by low oil prices," Raiffeisenbank analysts note, as revenues fell 10% from January to April. A from the Stockholm Institute of Transition Economics (SITE) also revealed that, despite narratives from the Kremlin, Russia's economy is under increasing strain from its in and Western sanctions. As Moscow and Kyiv discuss potential peace deals, the Russian economy may face another shock if military spending is reduced. Conversely – if peace talks fail – and the United States may impose additional on Russia, putting further strain on its economy. Read also: 'Time to increase the pressure' — Zelensky, European leaders speak with Trump following Istanbul peace talks We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
Int'l Business Times
25-04-2025
- Business
- Int'l Business Times
Russia Holds Key Rate At Two-decade High Despite Slowdown Fears
Russia's central bank kept borrowing costs at a two-decade high of 21 percent on Friday to combat rampant inflation, despite banks and businesses warning the economy was headed for a slowdown. Prices have been rising quickly across the Russian economy for months, driven up by massive government spending on the Ukraine conflict and deep labour shortages. Eye-watering lending rates have meanwhile hit businesses hard, with some of the country's top corporate leaders putting pressure on the central bank to relax rates. In a statement announcing the rate decision, Russia's central bank acknowledged lending activity was "subdued" but that inflation, running above 10 percent, was still too high. It said it would keep monetary conditions "as tight as necessary" until inflation returned to target. Russia's target rate of inflation is four percent, but price increases are not expected to reach that level until 2026, and could average between 7-8 percent in 2025. Speaking after the rate decision, central bank governor Elvira Nabiullina said inflation would likely start slowing down in May and compared high interest rates to "medicine". It is "a very effective medicine that has been tested repeatedly in very different conditions," she told a press conference. President Vladimir Putin has acknowledged that inflation is too high and on Thursday warned Russia's 2025 economic growth would be "slightly lower". But he said this was part of a "soft landing" that Russia was actually "striving for". Economists have warned for months of a slowdown in Russia's economic activity, with falling oil prices, high interest rates and a downturn in manufacturing all contributing to headwinds. The Russian branch of Raiffeisenbank said in a March research note that confidence in the manufacturing sector had "significantly decreased over the last couple of months", and that production in the oil industry had also slowed. Russia reported strong economic growth for 2024, largely due to massive state defence spending which is set to jump by almost 30 percent again in 2025. But economists have cautioned that growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity. Interest rate rises may also not be an effective tool to bring down inflation, as so much spending is being directed by the state, which is less responsive to higher borrowing costs, according to analysts.
France 24
25-04-2025
- Business
- France 24
Russia holds key rate at two-decade high despite slowdown fears
Prices have been rising quickly across the Russian economy for months, driven up by massive government spending on the Ukraine conflict and deep labour shortages. Eye-watering lending rates have meanwhile hit businesses hard, with some of the country's top corporate leaders putting pressure on the central bank to relax rates. In a statement announcing the rate decision, Russia's central bank acknowledged lending activity was "subdued" but that inflation, running above 10 percent, was still too high. Russia's target rate of inflation is four percent, but price increases are not expected to reach that level until 2026, and could average between 7-8 percent in 2025. "The Bank of Russia will maintain monetary conditions as tight as necessary to return inflation to the target in 2026," the bank said. In a video call with bank governor Elvira Nabiullina and cabinet officials on Thursday, President Vladimir Putin acknowledged that inflation was too high and that Russia's 2025 economic growth would be "slightly lower". But he said this was part of a "soft landing" that Russia was actually "striving for". Economists have warned for months of a slowdown in Russia's economic activity, with falling oil prices, high interest rates and a downturn in manufacturing all contributing to headwinds. Russian lender Raiffeisenbank said in a research note in March that confidence in the manufacturing sector had "significantly decreased over the last couple of months", and that production in the oil industry had also slowed. Russia reported strong economic growth for 2024, largely due to massive state defence spending which is set to jump by almost 30 percent again in 2025. But economists have cautioned that growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity. Interest rate rises may also not be an effective tool to bring down inflation, as so much spending is being directed by the state, which is less responsive to higher borrowing costs, according to analysts.
Yahoo
08-04-2025
- Business
- Yahoo
Russian economy slows sharply, with more turmoil on horizon
By Darya Korsunskaya MOSCOW (Reuters) - The Russian economy has slowed sharply in recent months, according to the latest economic data, and may be at further risk if a fall in oil prices and global market turmoil persist. Russia's growth, fuelled by spending on the three-year-old war in Ukraine, exceeded 4% in the past two years, but a labour shortage across many other sectors has contributed to a wage-price spiral that has pushed inflation above 10%. In response, the central bank has raised its key interest rate to 21%, the highest level since the early 2000s, prompting howls from business leaders who say it is stifling investment. Meanwhile, the price of Russia's main export, oil, is falling. GDP growth fell to 0.8% year-on-year in February from 3% in January, the lowest figure since March 2023, with transport, wholesale trade and mineral extraction leading the decline, according to data issued last week. Industrial output growth plunged to 0.2% from 2.2%. Economists said that, even though February was one day shorter than last year, signs of a slowdown were evident. "The deterioration in a significant part of the industrial sectors is becoming persistent. Signs of a slowdown are taking hold," Raiffeisenbank analysts said in a research note. They cited high interest rates, labour shortages, a lack of production capacity outside the defence sector and continued pressure from Western sanctions. And the slowdown is set to be exacerbated by a fall in the price of oil, which has hit its lowest levels since April 2021 on fears that U.S. President Donald Trump's import tariffs will trigger a global recession. STAGNATION CONTINUES Reports prepared by the economy ministry and central bank for a February 4 meeting with the government - weeks before the news of sweeping U.S. tariffs shocked investors around the world - had already flagged lower oil prices, budget constraints and a rise in bad corporate debt as risks to the economy. The ministry's report said it was becoming more likely that there would be a technical recession before inflation was under control, and that the slowdown in lending and investment caused by high interest rates was set to slow future growth. The latest data show that only sectors linked to military production or involved in substituting sanctioned imports are still growing. "In industry, stagnation continued," said experts from the TsMAKP think tank, which advises the government. It had previously said sectors outside the military-industrial complex had been stagnating since mid-2023. The data also showed that consumer demand, a major contributor to overall growth, slowed, with retail sales up only 2.2% in February after 5.4% in January. "This is yet another confirmation that, even though incomes continue to rise, the real drive from consumption is fading. We are beginning to reach a plateau in consumer demand," said Sofya Donets, chief economist at T-Bank. Furthermore, while Russia has been spared new U.S. import tariffs, Trump has threatened to impose sanctions aimed at further reducing Moscow's ability to sell oil unless it does more to achieve the ceasefire in Ukraine that he has demanded. AKIN TO RECESSION Car sales, which had grown at record rates over the last two years as the market recovered from the withdrawal of Western brands in 2022, were down by 25% year-on-year in the first quarter, and by 46% in March alone. Railway freight, monitored by many economists, was down 7.2% in March and 6.1% in the first quarter, including loadings of key export commodities such as oil, grains and metals. The S&P Global purchasing managers' index showed a sharp contraction in March in the manufacturing sector to the lows of 2022, amid a decline in production volumes and orders due to weak domestic and external demand. Economists in a Reuters poll last month predicted that GDP growth would slow to 1.7% in 2025 from 4.1% in 2024. The economy ministry forecast 2025 growth of 2.5%, compared with a central bank prediction of 1-2%. President Vladimir Putin urged his economic officials last month not to freeze the Russian economy as if it were in a "cryotherapy chamber" with their tight monetary policy, which many analysts interpreted as a call to start an easing cycle. "Delay is not death, but it is akin to a recession," said Anton Tabakh, an analyst from the Expert RA rating agency. (Writing by Gleb Bryanski; Editing by Kevin Liffey) Sign in to access your portfolio
Reuters
08-04-2025
- Business
- Reuters
Russian economy slows sharply, with more turmoil on horizon
Summary New data point to sharp economic slowdown Oil price fall creates new risks Industrial sectors outside defence are stagnating Pressure rising on central bank to lower rates MOSCOW, April 8 (Reuters) - The Russian economy has slowed sharply in recent months, according to the latest economic data, and may be at further risk if a fall in oil prices and global market turmoil persist. Russia's growth, fuelled by spending on the three-year-old war in Ukraine, exceeded 4% in the past two years, but a labour shortage across many other sectors has contributed to a wage-price spiral that has pushed inflation above 10%. In response, the central bank has raised its key interest rate to 21%, the highest level since the early 2000s, prompting howls from business leaders who say it is stifling investment. Meanwhile, the price of Russia's main export, oil, is falling. GDP growth fell to 0.8% year-on-year in February from 3% in January, the lowest figure since March 2023, with transport, wholesale trade and mineral extraction leading the decline, according to data issued last week. Industrial output growth plunged to 0.2% from 2.2%. Economists said that, even though February was one day shorter than last year, signs of a slowdown were evident. "The deterioration in a significant part of the industrial sectors is becoming persistent. Signs of a slowdown are taking hold," Raiffeisenbank analysts said in a research note. They cited high interest rates, labour shortages, a lack of production capacity outside the defence sector and continued pressure from Western sanctions. And the slowdown is set to be exacerbated by a fall in the price of oil, which has hit its lowest levels since April 2021 on fears that U.S. President Donald Trump's import tariffs will trigger a global recession. STAGNATION CONTINUES Reports prepared by the economy ministry and central bank for a February 4 meeting with the government - weeks before the news of sweeping U.S. tariffs shocked investors around the world - had already flagged lower oil prices, budget constraints and a rise in bad corporate debt as risks to the economy. The ministry's report said it was becoming more likely that there would be a technical recession before inflation was under control, and that the slowdown in lending and investment caused by high interest rates was set to slow future growth. The latest data show that only sectors linked to military production or involved in substituting sanctioned imports are still growing. "In industry, stagnation continued," said experts from the TsMAKP think tank, which advises the government. It had previously said sectors outside the military-industrial complex had been stagnating since mid-2023. The data also showed that consumer demand, a major contributor to overall growth, slowed, with retail sales up only 2.2% in February after 5.4% in January. "This is yet another confirmation that, even though incomes continue to rise, the real drive from consumption is fading. We are beginning to reach a plateau in consumer demand," said Sofya Donets, chief economist at T-Bank. Furthermore, while Russia has been spared new U.S. import tariffs, Trump has threatened to impose sanctions aimed at further reducing Moscow's ability to sell oil unless it does more to achieve the ceasefire in Ukraine that he has demanded. AKIN TO RECESSION Car sales, which had grown at record rates over the last two years as the market recovered from the withdrawal of Western brands in 2022, were down by 25% year-on-year in the first quarter, and by 46% in March alone. Railway freight, monitored by many economists, was down 7.2% in March and 6.1% in the first quarter, including loadings of key export commodities such as oil, grains and metals. The S&P Global purchasing managers' index showed a sharp contraction in March in the manufacturing sector to the lows of 2022, amid a decline in production volumes and orders due to weak domestic and external demand. Economists in a Reuters poll last month predicted that GDP growth would slow to 1.7% in 2025 from 4.1% in 2024. The economy ministry forecast 2025 growth of 2.5%, compared with a central bank prediction of 1-2%. President Vladimir Putin urged his economic officials last month not to freeze the Russian economy as if it were in a "cryotherapy chamber" with their tight monetary policy, which many analysts interpreted as a call to start an easing cycle. "Delay is not death, but it is akin to a recession," said Anton Tabakh, an analyst from the Expert RA rating agency.
