Russia has been dealt yet another financial blow as its own economy minister warned of an impending recession. Maxim Reshetnikov said Moscow was “on the brink” during the St. Petersburg International Economic Forum. He added that the government’s actions would determine the extent of future economic decline.
Russian business news outlet RBC quoted the official as saying: “The numbers indicate cooling, but all our numbers are [like] a rearview 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 … Going forward, it all depends on our decisions.” However, Finance Minister Anton Siluanov and Central Bank Governor Elvira Nabiullina gave more optimistic assessments.
Siluanov said the economy was “cooling”, but noted that after any cooling “the summer always comes”. Nabiullina added that Russia’s economy was merely “coming out of overheating”.
Despite being hit with a slew of sanctions after the Kremlin sent troops into Ukraine in February 2022, the economy has so far outperformed predictions.
However, over the long term, inflation and a lack of foreign investments remain threats to the economy amid staggering military spending.
There is mounting pressure on the economy to garner investments in sectors other than the military or risk stagnation.
This comes after Russia was issued a dire prediction regarding its most vital resources – oil and gas.
The Russian government is expected to collect 8.3 trillion rubles (£78 billion) in oil and gas taxes this year – 2.6 trillion rubles (£24.3 billion) less than initially projected.
As a result, the country’s deficit is set to soar to an eyewatering 3.8 trillion rubles (£5.6 billion) – more than triple the originally planned figure and the highest since the COVID-19 pandemic.
Oil prices are far below the Russian government’s expectations. The original budget had assumed a price of 6,700 rubles (£63), while the Economic Development Ministry’s revised forecast in May still set a target of 5,300 rubles (£50).
While Urals averaged around 5,900 rubles (£55) in the first quarter of 2025, oil and gas revenues have still fallen by 10% year-on-year.