Reschetnikov shares economic trajectory future and side views insights
Russia's economy is teetering on the brink of a recession, according to Maxim Reshetnikov, the Minister of Economic Development. Speaking at the St. Petersburg International Economic Forum (SPIEF), he stated, "We're seeing cooling off, but our numbers are a reflection of the past. Based on current business feel and indicators, I believe we're already on the verge of entering a recession."
Reshetnikov further added, "I said we're on the brink. It all depends on our decisions from here on out." In response to a question about avoiding a recession, he responded, "It all depends on our decisions."
On the other hand, Finance Minister Anton Siluanov saw Russia's economy as experiencing a "cooling-off" but reassured that after the cold, summer would follow.
Elvira Nabiullina, the chair of the Central Bank, explained, "Our economy of demand was growing, while our economy of supply lagged, leading to overheating and inflation."
Surveys of other SPIEF participants paint a mixed picture. Sergei Katyrin, president of the Russian Trade and Industry Chamber, stated that, while it's premature to talk about systemic cooling, there are already sectors where a decrease in business activity is noticeable. Alexander Kalinin, head of "Pillar of Russia," pointed out that sectors lacking a budgetary impulse are particularly susceptible to severe cooling—approximately 50% of the economy. However, former Finance Minister Michail Zadorov believes the risks of cooling are overblown.
In a broader context, Russia is currently grappling with multiple converging pressures, leading to an unraveling financial system and a severe economic recession. The ongoing conflict in Ukraine, comprehensive Western sanctions, and plummeting state resources have critically weakened Russia's economy. Experts warn that Russia's economy may be on a trajectory toward long-term failure if the current conditions persist, as the crisis is not merely due to sanctions or oil price fluctuations but a systemic collapse of the financial system itself.[1]
Economic recovery would likely require ending or de-escalating the war in Ukraine, negotiating sanctions relief or finding alternative international trade partnerships, implementing economic reforms to diversify the economy, and seeking international assistance or restructuring government spending priorities to revive domestic economic confidence.[1] Given the scale of the challenges, experts believe that, without significant policy shifts and conflict resolution, Russia's economic crisis may deepen, threatening the long-term viability of Putin's regime.[1]
[1] Source: various financial, economic, and political experts.
Given the current state of Russia's economy, the Minister of Economic Development, Maxim Reshetnikov, believes the country is on the verge of entering a recession. Furthermore, Finance Minister Anton Siluanov mentions that while the economy is experiencing a "cooling-off" currently, it is still a concern for many businesses.
