Russian minister says country's economy is ‘on the verge' of recession

Vladimir Putin
's economy minister has warned that
Russia
is 'on the verge' of recession as he spoke on the second day of a signature event meant to bolster economic confidence. The minister, Maxim Reshetnikov, said at the St Petersburg economic forum that his view was based on 'current business sentiment and indicators' pointing to a slowdown.
'Everything else depends on our decisions,' Reshetnikov said, calling for the central bank to show a 'little love for the economy'.
Russia's central bank raised interest rates to an eye-watering 21 per cent in October 2024 to combat inflation and kept them at that level until this month when it eased them to 20 per cent. Russia's economic growth slowed to 1.4 per cent year-on-year in the first quarter of 2025, the lowest quarterly figure in two years.
Prices are rising across the economy driven up by massive government spending on the war and widespread labour shortages. Annual inflation has been more than double the central bank's 4 per cent target for more than a year.
READ MORE
Economists have warned since the war began that any Russian growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity.
In
Ukraine
, Kharkiv and Odesa were under attack from Russian-launched drones in the early hours of Friday, according to local officials and social media channels.
Ukraine's Zaporizhzhia nuclear power plant 'cannot start operating again as long as this large-scale war continues', the UN nuclear agency has said. The plant, illegally held by the Russians, has too many issues with cooling water and its need for electricity supplied from off-site, the IAEA said.
Russia and Ukraine said on Thursday that they had completed another exchange of captured soldiers. Neither side said how many. 'Our people are returning home from Russian captivity,' said
Volodymyr Zelenskiy
, the Ukrainian president. The Ukrainian government agency overseeing the exchanges said it involved 'seriously ill and wounded' soldiers. Russia's defence ministry also confirmed the exchange.
Mr Zelenskiy said on Thursday that Russia's defence of
Iran
's authorities underscored the need for intensified sanctions against Moscow. Its deployment of Iranian-designed Shahed drones and North Korean munitions was proof that Kyiv's allies were applying insufficient pressure against the Kremlin. 'When one of their accomplices loses their capability to export war, Russia is weakened and tries to interfere. This is so cynical and proves time and again that aggressive regimes cannot be allowed to unite and become partners.'
The Ukrainian foreign minister, Andrii Sybiha, said
the conflict between Israel and Iran
had exposed Russian hypocrisy, with Moscow condemning strikes against Tehran while 'ruthlessly' attacking Ukraine. 'The only rational conclusion is that Russia cannot be trusted in any situation, and it is always part of the problem rather than the solution.'
Fighting between Iran and Israel could deflect global attention from the Russian invasion of Ukraine and even bolster the Kremlin's war effort, a senior Ukrainian political source told AFP. The conflict has pushed up the price of oil and 'for Ukraine, the challenge is the price of oil, because if prices remain high for a long time, the Russians will earn more'. However, Kyiv has welcomed Israeli attacks on a country that has directly aided and provided weapons to Russia.
Denmark
, when it takes over the presidency of the European Council, will continue preparing Ukraine for
EU
membership against the objections of Hungary, the Danish Europe minister, Marie Bjerre, said on Thursday. The Danish presidency begins on July 1st.
'Unfortunately, Hungary is blocking and we are trying to put as much pressure there as we can and also do everything we can to make Ukraine continue with the necessary reform work,' said Bjerre. - Guardian

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Irish Times

6 hours ago

• Irish Times

Russian minister says country's economy is ‘on the verge' of recession

Vladimir Putin 's economy minister has warned that Russia is 'on the verge' of recession as he spoke on the second day of a signature event meant to bolster economic confidence. The minister, Maxim Reshetnikov, said at the St Petersburg economic forum that his view was based on 'current business sentiment and indicators' pointing to a slowdown. 'Everything else depends on our decisions,' Reshetnikov said, calling for the central bank to show a 'little love for the economy'. Russia's central bank raised interest rates to an eye-watering 21 per cent in October 2024 to combat inflation and kept them at that level until this month when it eased them to 20 per cent. Russia's economic growth slowed to 1.4 per cent year-on-year in the first quarter of 2025, the lowest quarterly figure in two years. Prices are rising across the economy driven up by massive government spending on the war and widespread labour shortages. Annual inflation has been more than double the central bank's 4 per cent target for more than a year. READ MORE Economists have warned since the war began that any Russian growth driven by the defence industry is unsustainable and does not reflect a real increase in productivity. In Ukraine , Kharkiv and Odesa were under attack from Russian-launched drones in the early hours of Friday, according to local officials and social media channels. Ukraine's Zaporizhzhia nuclear power plant 'cannot start operating again as long as this large-scale war continues', the UN nuclear agency has said. The plant, illegally held by the Russians, has too many issues with cooling water and its need for electricity supplied from off-site, the IAEA said. Russia and Ukraine said on Thursday that they had completed another exchange of captured soldiers. Neither side said how many. 'Our people are returning home from Russian captivity,' said Volodymyr Zelenskiy , the Ukrainian president. The Ukrainian government agency overseeing the exchanges said it involved 'seriously ill and wounded' soldiers. Russia's defence ministry also confirmed the exchange. Mr Zelenskiy said on Thursday that Russia's defence of Iran 's authorities underscored the need for intensified sanctions against Moscow. Its deployment of Iranian-designed Shahed drones and North Korean munitions was proof that Kyiv's allies were applying insufficient pressure against the Kremlin. 'When one of their accomplices loses their capability to export war, Russia is weakened and tries to interfere. This is so cynical and proves time and again that aggressive regimes cannot be allowed to unite and become partners.' The Ukrainian foreign minister, Andrii Sybiha, said the conflict between Israel and Iran had exposed Russian hypocrisy, with Moscow condemning strikes against Tehran while 'ruthlessly' attacking Ukraine. 'The only rational conclusion is that Russia cannot be trusted in any situation, and it is always part of the problem rather than the solution.' Fighting between Iran and Israel could deflect global attention from the Russian invasion of Ukraine and even bolster the Kremlin's war effort, a senior Ukrainian political source told AFP. The conflict has pushed up the price of oil and 'for Ukraine, the challenge is the price of oil, because if prices remain high for a long time, the Russians will earn more'. However, Kyiv has welcomed Israeli attacks on a country that has directly aided and provided weapons to Russia. Denmark , when it takes over the presidency of the European Council, will continue preparing Ukraine for EU membership against the objections of Hungary, the Danish Europe minister, Marie Bjerre, said on Thursday. The Danish presidency begins on July 1st. 'Unfortunately, Hungary is blocking and we are trying to put as much pressure there as we can and also do everything we can to make Ukraine continue with the necessary reform work,' said Bjerre. - Guardian

Irish Times

20 hours ago

• Irish Times

Europe should stop whining and ‘act like the superpower' it is, former US general warns

Europe should 'quit whining' about the threats it faces and 'act like the superpower' that it is, according to a former senior US army officer. Ben Hodges , a retired lieutenant general who led US forces in Europe from 2014 to 2017, also said European Nato members including Germany should prepare for future Russian air strikes on their air and sea ports. Mr Hodges, who was addressing a gathering of foreign affairs experts in London on Thursday, said the missile defences of European countries in the US-led Nato alliance are 'completely inadequate' to protect transport infrastructure. He told the event, hosted by the Chatham House think tank, that Germany could in the years ahead face the same sort of air strikes Ukraine has endured since the Russian invasion in 2022. READ MORE Mr Hodges told the conference that European Nato states should focus on preparing their citizens for the possibility of war with Russia. 'There is a threat. Explain it to your population like adults.' In the event that the US pulls back from defending Europe under Donald Trump , Mr Hodges said he felt the continent 'of course has the capability of defending itself'. But he also suggested European states lack the political will to do so. Europe needed the 'self confidence' to be more assertive in the face of Russian threats, he said. A 'true deterrence' of Russia would require it to be convinced that European societies, at every level, were prepared and willing to deal with military action against president Vladimir Putin's nation. [ Ireland must stop 'free-riding' on security 'gifted by others', says former Chief of Staff Opens in new window ] A journalist from LBC radio station asked for the retired lieutenant general's response to the assertion that the British public does not take seriously gloomy threats of the potential for war with Russia. The broadcaster suggested this was because people were cynical after being duped into believing Iraq had weapons of mass destruction (WMDs) in 2003, which was used as a pretext for war but turned out to be untrue. [ Britain to move closer to 'warfighting readiness' as review calls for defence overhaul Opens in new window ] Mr Hodges said it was a 'fair question' and recalled his own experiences looking in 'bunkers with flashlights for WMDs in Iraq' and finding to his surprise that none existed. He said Russia had yet to feel enough pushback from Europe and also the US over its war against Ukraine . He suggested Russia's oil and gas infrastructure should be put under 'pressure' and said Mr Putin had, in effect, already 'attacked' Nato states by, for example, launching air incursions over Estonia. A conference attendee challenged Mr Hodges by suggesting that diplomacy with Russia might achieve better results than war posturing, but he replied that Russia could not be trusted to uphold any diplomatic agreement and hard pressure was the only way to keep Mr Putin in check.

Irish Examiner

20 hours ago

• Irish Examiner

Russia ‘on brink of recession', says economy minister

Russia's economy is 'on the brink of going into a recession', the country's economy minister has said, according to reports. Economy minister Maxim Reshetnikov delivered the warning at the St Petersburg International Economic Forum, the annual event in Russia's second largest city designed to highlight the country's economic prowess and court foreign investors. Russian business news outlet RBC quoted the official as saying 'the numbers indicate cooling, but all our numbers are (like) a rear-view mirror. 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.' Economy minister Maxim Reshetnikov was speaking at the forum held annually in St Petersburg (Roscongress Foundation via AP) Russia's economy, hit with a slew of sanctions after the Kremlin sent troops into Ukraine in February 2022, has so far outperformed predictions. High defence spending has propelled growth and kept unemployment low despite fuelling inflation. At the same time, wages have gone up to keep pace with inflation, leaving many workers better off. Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine have also put more income into the country's poorer regions. But over the long-term, inflation and a lack of foreign investments remain threats to the economy, leaving a question mark over how long the militarised economy can keep going. Economists have warned of mounting pressure on the economy and the likelihood it would stagnate due to lack of investment in sectors other than the military. Russian president Vladimir Putin (Dmitri Lovetsky/AP) Speaking at one of the sessions of the forum in St Petersburg, Mr Reshetnikov said Russia was 'on the brink', and whether the country would slide into a recession or not depends on the government's actions. 'Going forward, it all depends on our decisions,' Mr Reshetnikov said, according to RBC. RBC reported that Russia's finance minister Anton Siluanov and Central Bank governor Elvira Nabiullina gave more optimistic assessments. Mr Siluanov spoke about the economy 'cooling' but noted that after any cooling 'the summer always comes', RBC reported. Ms Nabiullina said Russia's economy was merely 'coming out of overheating', according to RBC.