**Russia’s Economy on the Brink of Recession, Warns Minister**
In a worrying sign for Russia’s economic stability, Economy Minister Maxim Reshetnikov has warned that the country is on the verge of a recession. Speaking at the St. Petersburg International Economic Forum, Reshetnikov cautioned that the next few months will be crucial in determining the fate of Russia’s economy.
Reshetnikov’s comments come as Russia continues its war against Ukraine, which has led to soaring inflation and a significant economic slowdown. The minister acknowledged that Russia is facing a “cooling stage” in its economy, with numbers indicating a possible transition into recession. However, he emphasized that a recession is not inevitable, and that the government’s decisions will play a crucial role in determining the outcome.
**Economic Challenges Mount**
Russia’s economy has been under strain due to the war in Ukraine, which has led to record wartime spending. To combat soaring inflation, the central bank has set one of the highest key interest rates in decades, hurting private investments in non-defense-related sectors. Despite government pressure, the central bank recently cut the interest rate from 21% to 20%, a move that Reshetnikov had urged earlier.
The economy is also facing challenges due to plummeting oil prices and supply difficulties, which have forced major Russian exporters to cut down on rail shipments of metals and oil products. These cuts are expected to further exacerbate the economic slowdown.
**Growth Targets at Risk**
Russian President Vladimir Putin has set a 3% growth target for the economy, but with the current trends, it seems increasingly unlikely that this goal will be achieved. The government’s efforts to boost growth through interest rate cuts may not be enough to offset the negative impact of sanctions, low oil prices, and high inflation.
**What’s Next?**
Reshetnikov’s warnings highlight the need for the Russian government to take decisive action to address the economic challenges facing the country. Analysts have connected the recent slowdown in Russia’s economic growth to central bank policies, sanctions, low oil prices, supply difficulties, and high inflation. As the situation continues to unfold, it remains to be seen whether the government will be able to steer the economy back on track.
Read More @ kyivindependent.com
