Russian Government, Central Bank Spar Over Economic Downturn
Russian officials sparred publicly on Friday over how to boost the economy, as growth slows more than three years into its Ukraine offensive.
Moscow had shown unexpected economic resilience in 2023 and 2024, despite the West's sweeping sanctions, with massive state spending on the military powering a robust expansion.
But economists have long warned that heavy public investment in the defence industry is no longer enough to keep Russia's economy growing.
Businesses and some government figures have urged the central bank to further cut interest rates to stimulate activity.
"The indicators show the need to reduce rates," Deputy Prime Minister Alexander Novak said at Russia's flagship economic forum in Saint Petersburg.
"We must move from a controlled cooling to a warming of the economy," said Novak, who oversees Russia's key energy portfolio in the government.
He described the current economic situation facing the country as "painful".
The call for more cuts to borrowing costs comes a day after Moscow's economy minister warned the country was "on the verge of a recession".
"A simple and quick cut in the key rate is unlikely to change anything much at the moment, except for... an increase in the price level," the central bank's monetary policy department chief Andrey Gangan said.
The central bank lowered interest rates from a two-decade-high earlier this month, its first cut since September 2022.
The bank, which reduced the rate from 21 percent to 20 percent, said at the time that Russia's rapid inflation was starting to come under control but monetary policy would "remain tight for a long period".
The central bank has resisted pressure for further cuts, pointing to inflation of around 10 percent, more than double its four-percent target.
Russia's gross domestic product (GDP) growth slowed to 1.4 percent year-on-year in the first quarter, the lowest quarterly figure in two years.
Russian President Vladimir Putin, who has typically been content to let his officials argue publicly over some areas of economic policy, is set to speak on Friday afternoon at the plenary session of the economic forum.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
DW
2 hours ago
- DW
Putin: 'All Ukraine of is ours' in theory, eyes Sumy city – DW
Russian President Vladimir Putin has revived a controversial narrative, claiming that theoretically "all of Ukraine is ours." He also sparked more immediate concerns with comments about seizing Ukraine's city of Sumy. Russian President Vladimir Putin has declared that Russians and Ukrainians are "one people" and that, in that sense, "all of Ukraine is ours." The assertion underscores Moscow's continued underlying rejection of Ukrainian sovereignty and raises renewed alarm over Russia's territorial ambitions. What did Putin say about Ukraine's sovereignty? Speaking at the St. Petersburg International Economic Forum on Friday, Putin issued a series of provocative remarks, notably stating: "We have a saying… where the foot of a Russian soldier steps, that is ours." He was responding to a question about Russia's objectives for its full-scale invasion of Ukraine, launched in February 2022. The Russian leader emphasized that while Russia "never doubted" Ukraine's sovereignty after its 1991 independence, it had declared itself a neutral state — a stance he accused Ukraine of having abandoned. Reiterating a longstanding narrative, he said Russians and Ukrainians were essentially the same nation — a position Kyiv and its Western allies categorically reject. "I have said many times that I consider the Russian and Ukrainian peoples to be one people. In this sense, all of Ukraine is ours," Putin said Ukraine said Putin's comments showed his "disdain" for the peace process. "Putin's cynical statements demonstrate complete disdain for US peace efforts," Ukrainian Foreign Minister Andriy Sybiga said in a post on X. "The only way to force Russia into peace is to deprive it of its sense of impunity." What did Putin say about Sumy? Among the key developments, Putin said he did not "rule out" the capture of the northeastern Ukrainian city of Sumy, which lies roughly 30 kilometers (just over 18 miles) from the Russian border. Russian missiles hit apartments and schools in Kyiv To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video "We have no objective to take Sumy but, in principle, I do not rule it out," he said, accusing Ukrainian forces of persistently shelling Russian border areas. He added that Russian troops had already penetrated up to 12 kilometers into Ukrainian territory in the Sumy region to create what he called a protective "buffer zone." Sumy, though not among the five Ukrainian regions Moscow claims to have annexed — Donetsk, Luhansk, Kherson, Zaporizhzhia, and Crimea — has been a frequent target of Russian attacks. It also served as a launching point for a Ukrainian counteroffensive into Russia's western Kursk region last August, during which Kyiv's forces briefly captured dozens of settlements before being pushed back by Russian troops — bolstered by thousands of North Korean soldiers, according to reports. Putin's remarks come amid growing skepticism over the viability of peace negotiations, with Moscow continuing to demand further Ukrainian territorial concessions as a precondition for any ceasefire. Edited by Sean Sinico
Int'l Business Times
3 hours ago
- Int'l Business Times
Russia Might Try To Take Ukrainian City Of Sumy, Putin Says
Russian President Vladimir Putin said Friday he did not "rule out" his forces attempting to seize the northeastern Ukrainian city of Sumy, raising fresh doubts over the prospect of peace talks between Moscow and Kyiv. Diplomatic efforts to end the three-year conflict have stalled in recent weeks and Kyiv has accused Moscow of deliberately sabotaging a peace deal to prolong its full-scale offensive on the country. Russia currently occupies around a fifth of Ukraine and has claimed four Ukrainian regions as its own since launching its assault in 2022, in addition to Crimea, which it captured in 2014. The Sumy region is not one of the regions Moscow has formally annexed, although Russian forces have recently made inroads there for the first time in three years. At Russia's flagship economic forum in Saint Petersburg, Putin suggested Moscow could take Sumy as part of a "buffer zone" along the border and repeated his denial of Ukrainian statehood. "We have no objective to take Sumy, but in principle I do not rule it out... They pose a constant threat to us, constantly shelling the border areas," Putin said. "I consider Russians and Ukrainians to be one people. In that sense, all of Ukraine is ours," he told attendees, when asked why his army was entering areas Moscow did not claim as its own. "There is a saying: where ever a Russian soldier sets foot, that is ours." Sumy is around 30 kilometres (18 miles) from the Russian border and has been heavily targeted throughout the conflict. Putin's widening territorial ambitions are likely to roil Kyiv, which has accused Moscow of not wanting to end the fighting. The two sides held rounds of direct talks in Istanbul in May and in June, but Kyiv accused Moscow of sending "dummy" negotiators with no real power to enact a peace deal. Putin has declined to take part in the peace talks in person and on Thursday said he would only meet Ukrainian counterpart Volodymyr Zelensky during a "final phase" of negotiations on ending the three-year conflict. He has also insisted Ukraine give up territory it already controls for peace. Kyiv says it cannot and will not accept Russian occupation of any part of its land. In his address Friday, Putin denied he was calling for Ukraine to "capitulate". "We are not seeking Ukraine's surrender. We insist on recognition of the realities that have developed on the ground," the Russian leader said. Putin repeated that Moscow was "advancing on all fronts" and that his troops had penetrated up to 12 kilometres (seven miles) into the Sumy region. He also accused Kyiv of "stupidity" by launching an incursion into Russia's Kursk region last August. "They are creating problems for themselves," he said. Russia has for months been rejecting calls for an unconditional ceasefire, launching deadly attacks on its neighbour. Putin has repeatedly declined to take part in the peace talks AFP
Int'l Business Times
4 hours ago
- Int'l Business Times
GOP Lawmaker Berated After Urging Users to 'Reject Marx' in Support of Privatizing Public Lands: 'So Roosevelt Was a Marxist?'
A Republican lawmaker was ridiculed online after urging Americans to "reject Marx" as he proposes privatization of some public lands as part of his colleagues' spending bill. Utah Sen. Mike Lee added a section into what President Donald Trump has called the "one big, beautiful bill" that would allow the sale of 2 million acres of public land, The Hill reported. After Lee's proposal was revealed, the senator was met with prompt backlash online, with several users expressing concerns about conservation efforts and wildlife protections. Lee turned to X Thursday night to defend his idea, encouraging users to "Reject Marx & Lenin" and "Embrace private land ownership." The senator was referring to philosopher Karl Marx and Russian revolutionary Vladimir Lenin, who are widely known for spreading communist and socialist ideologies. However, the senator seemingly drawing comparisons of keeping public lands public to Marxist thought was met with fierce opposition online. "Communism is when you refuse to sell Yellowstone to BlackRock," one user mocked. Another simply wrote, "Such a terrible idea." "Give Up. You've lost. You have managed to unite the country on at least one issue though. Good job!" one user added, noting that the idea has been met with bipartisan backlash. Several users were quick to note that Lee's proposal to sell public lands appeared to go against the ideas of former President Theodore Roosevelt, who is known for his staunch support of national parks and preservation of historic landmarks. "Theodore Roosevelt? The communist?" one user commented. Another added, "So Roosevelt was a Marxist, Mike? That's the position you want to take?" The senator has insisted that the bill would not mean that parts of national parks or wilderness areas could be bought. However, millions of acres of land run by the Bureau of Land Management and Forest Service could be up for sale, according to an analysis by The Wilderness Society. Originally published on Latin Times
