Russia’s Economy Faces Potential Downturn, Says Economic Minister at St. Petersburg Forum
Russia’s economy is “on the brink of going into a recession,” according to Economy Minister Maxim Reshetnikov, who delivered the warning during the annual St. Petersburg International Economic Forum on Thursday, the Associated Press reports.
His remarks, reported by Russian business outlet RBC, come amid mounting concerns over inflation, declining investment, and the long-term sustainability of the country’s war-driven economic activity.
Speaking candidly at one of the forum’s sessions, Reshetnikov described economic indicators as showing signs of cooling and emphasized the current mood among businesses.
“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,” he said.
Russia’s economy has defied many early forecasts made after Western sanctions were imposed in response to the 2022 invasion of Ukraine. Elevated government spending on defense has stimulated growth and kept unemployment low. Rising wages have also helped shield many households from inflation, and military-related incentives—such as enlistment bonuses and death benefits—have boosted income in lower-income regions.
However, concerns remain about the durability of this model. Economists warn that without broader investment beyond the military sector, the economy may stagnate. Inflation and limited access to foreign capital and technology continue to weigh on growth prospects.
Reshetnikov noted that the country’s economic direction now hinges on policy decisions.
“Going forward, it all depends on our decisions,” he said, suggesting that a shift in government action could influence whether Russia enters a full recession.
Other top officials offered a more tempered outlook. Finance Minister Anton Siluanov acknowledged a cooling economy but downplayed the severity, stating, “after any cooling, the summer always comes.” Meanwhile, Central Bank Governor Elvira Nabiullina described the current trend as a normal adjustment.
“The economy is coming out of overheating,” she said, framing the slowdown as a correction rather than a contraction.
