Saint Petersburg (Reuters)-The Russian economy is about to fall into recession, the Minister of the Economy said Thursday, Maxime Réchetnikov, during the International Economic Forum in Saint Petersburg.

Russia has reduced its interest rates this month for the first time since 2022, bringing them from 21% to 20%, and companies have complained for months that high borrowing costs are stifling investments and economic growth is starting to slow down.

“According to the figures, there is a cooling, but all our figures are in the rear view mirror,” said Maxime Rérenikov.

“According to the current feelings of companies and the indicators of conjuncture, we are already, it seems to me, about to enter a recession. On the edge,” he added.

During the same session of the forum, the government of the central bank, Elvira Nabioullina, said that the slowdown in GDP growth was “a way to get out of overheating”.

Quoted by the RIA news agency, the spokesperson for Kremlin, Dmitri Peskov, said Thursday that the recent drop in a percentage point of interest rates was not sufficient and that the current rate slowed down the economy, but that this slowdown was “aware”.

Alexandre Vedyakhine, first deputy director general of Sberbank, the largest Russian bank, said in an interview with Reuters this week that restrictive monetary policy created risks of overheating and estimated that acceptable interest rates to stimulate investment loans should be in a range of 12 % to 14 %.

“There is a risk of excessive cooling of the economy, that we are not able to get out of this hollow and that future growth is moderate,” he said.

(Report by Darya Korsunskaya and Elena Fabrichnaya, written by Alexander Marrow; Diana Mandia, edited by Sophie Louet)

Copyright © 2025 Thomson Reuters