Russia Edges Toward Recession as Economic Momentum Wanes

In a candid disclosure at the St Petersburg International Economic Forum, Russia's Economy Minister Maxim Reshetnikov acknowledged that the nation's economy is on the verge of recession. This announcement comes following the Central Bank's recent decision to cut interest rates for the first time since 2022, reducing the cost of borrowing to 20% from 21%.

Businesses, however, have expressed ongoing concerns that the rates are still too high, stifling investment and slowing economic growth. Reshetnikov noted that while current figures show a cooling, business sentiment and indicators point to an imminent recession.

Central Bank Governor Elvira Nabiullina described the GDP slowdown as a correction from past overheating. Meanwhile, Sberbank's First Deputy CEO Alexander Vedyakhin highlighted the risks of 'overcooling,' suggesting that much lower interest rates, between 12-14%, would be necessary to stimulate investment lending and avert prolonged economic stagnation.

(With inputs from agencies.)