Cooling growth should not be confused with a contraction, Elvira Nabiullina has said
Russia is not in recession, central bank governor Elvira Nabiullina said on Thursday, adding that a slowdown in growth should not be mistaken for an outright contraction.
Since the Ukraine conflict escalated in 2022, Russia has operated under sweeping Western sanctions. The economy, however, has proved resilient, with GDP expanding 4.1% in 2023 and 4.3% in 2024. Growth is expected to slow to 2.5% this year, with the central bank’s forecast even more cautious, at 1-2%.
Nabiullina said Russia was experiencing an economic slowdown but not a recession, stressing that even the criteria for a technical recession — two consecutive quarters of contraction — had not been met.
“One should not confuse a recession, which I agree is associated with very negative phenomena, with an economic slowdown. Yes, the economy is slowing, but there is no recession,” she said at the Moscow Financial Forum.
She noted that growth had cooled to more moderate levels after a period of overheating, though the summer months had brought signs of renewed activity, including stronger consumer demand and rising corporate lending.
Earlier this month, Russian Economic Development Minister Maksim Reshetnikov said growth was slowing faster than expected and that forecasts were being revised. He had earlier warned that the country was close to recession, with the outcome hinging on policy and interest rates. The central bank, which raised its key rate to a record 21% in October 2024 to curb inflation, has since cut it to 17%.
His warnings were echoed by Sberbank CEO Herman Gref, who described the second quarter (April-June) as a period of “technical stagnation” and urged timely measures, including lower borrowing costs, to avoid slipping into recession. “July and August showed clear signs we are approaching zero growth,” he said.
Russian President Vladimir Putin disagreed with the assessment, saying that while many were unhappy with the central bank’s key rate, it was necessary to fight inflation. He warned that sharp cuts to the rate could trigger higher prices.