While praising the vigor of Russian growth a few weeks ago, Vladimir Putin is now worried about a possible recession, which should not come “in any case,” said on Friday, June 20 in the Economic Forum in St. Petersburg.
This risk of imminent recession had been recognized the day before by its Minister of the Economy, Maxime Recagenikov, in the same economic forum. Russian GDP had resisted quite well so far (+4.1% last year and 3.6% in 2023).
But growth fell to 0.8% in the annual change in February, against 3% in January, the lowest figure since March 2023. The Ministry of the Economy provides a 2.5% growth in 2025, against a prognosis of the central bank from 1 to 2%.
In fact, large public investments in the military-industrial complex to support the Russian army no longer make it possible to stimulate the economy.
In addition, inflation is at a very high level, with 9.8% for a year in June, according to the Central Bank (BCR). Food prices have particularly risen, especially potatoes, a basic food in the country.
The increase in prices is also driven by the shortage of labor that increase wages without economists notice any increase in productivity.
High interest rate
The Russian government and the Central Bank of Russia (BCR) opposed Friday at the Economic Forum in St. Petersburg on the means to establish to energize the activity, In full slow growth After two years of overheating caused by the consequences of the conflict in Ukraine.
Russia reduced your interest rates this month For the first time since 2022, bringing them from 21% to 20%, while companies have complained for months that high indebted costs are suffocating investments and economic growth is beginning to decrease.
Alexandre Vedyakhine, the first Sberbank general deputy director, the largest Russian bank, recently said in an interview with the Reuters agency that the restrictive monetary policy created overheating risks and estimated that acceptable interest rates to stimulate investment loans should be in a range of 12 % to 14 %.
“There is the risk of excessive cooling of the economy, that we cannot get out of this hole and that future growth is moderate,” said Alexandre Vedyakhine.
Russia “depends more than ever on war effort and the income of fossil fuels,” Adina Revol, former spokesman for the European Commission, in BFM Business, recently stressed, in BFM Business, For whom “the Russian economy is decreasing”. “An economy transformed into the war economy does not produce real wealth. The indicators are in red,” said Adina Revol, also a teacher of Sciences Po.
Source: BFM TV
