Russian Economy Minister Signals Imminent Recession Amid Economic Forum Discussions

Russia’s economy is on the «verge of recession,» Economy Minister Maxim Reshetnikov cautioned on Thursday, casting a grim outlook over the annual St. Petersburg International Economic Forum (SPIEF), which is significant for attracting investment to the nation.

During the forum’s second day, Reshetnikov indicated that «current business sentiment and indicators» suggest an imminent economic downturn.

«In general, I believe we are at the edge of a recession,» he told reporters. «The future hinges on our actions,» he emphasized, calling on Russia’s Central Bank to demonstrate «a bit of affection for the economy.»

Since the full-scale invasion of Ukraine in February 2022, Russia’s economy has experienced considerable instability, with slowing growth following a period of unprecedented defense spending that led to an «overheated» economy.

Although officials announced robust growth in 2023 and early 2024, economists have cautioned that this growth, driven by the war, lacks sustainability and does not truly reflect improvements in productivity.

In the first quarter of 2025, Russia’s GDP experienced a modest year-on-year growth of just 1.4%, marking the slowest rate in two years.

Reshetnikov’s comments come amid growing worries regarding the nation’s elevated interest rates and industrial decline. The Central Bank increased its key rate to 21% in October to combat inflation, maintaining this rate until earlier this month when it implemented a slight reduction to 20%.

At the same time, inflation continues to be high, fueled by government spending and workforce shortages. Although annual inflation fell below 10% in May, it has remained more than twice the Central Bank’s 4% target for over a year.