Russia’s economy is under growing strain after its top central banker warned that the financial lifelines which helped sustain the country through two years of war and sanctions have now run dry. Speaking at the St Petersburg International Economic Forum, Bank of Russia Governor in a clip shared by former Ukrainian interior ministry adviser Anton Gerashchenko, Elvira Nabiullina said: “We have experienced relatively high growth over the past two years because we were able to tap into unused resources and labour.
“The reserves have largely been used up, and many companies are now facing a labour shortage. Additionally, we had financial resources accumulated in the National Wealth Fund, which have been directed toward investment. We had capital reserves in the banking system, which served as a foundation for accelerated lending. But many of these resources have indeed been depleted.”
Nabiullina added: “The resources that had enabled the Russian economy to grow for two years under conditions of war and sanctions have been exhausted.”
Her comments underline growing concerns over the sustainability of Russia’s wartime economy. According to Rosstat, capacity utilisation at Russian industrial enterprises has reached 80.6% — the highest level recorded in the post-Soviet period.
Meanwhile, the liquid assets of the National Wealth Fund have shrunk to 2.8 trillion rubles — down from more than 8 trillion rubles before the full-scale invasion of Ukraine ordered by President Vladimir Putin in 2022. That equates to around £26 billion.
Russian Minister of Economic Development Maxim Reshetnikov, speaking at the same event, added: “According to the figures, we’re seeing a cooling. But all our figures are like a rearview mirror. Based on current business sentiment and leading indicators, I think we’re on the verge of slipping into a recession.”
Chairman of the State Duma Committee on Budget and Taxes Andrey Makarov said: “Are we going to fall in? You’re the Minister of the Economy — say something optimistic, otherwise the whole Internet will be saying Reshetnikov predicted a recession.”
Economists at the Russian Presidential Academy of National Economy and Public Administration (RANEPA) have warned that if current spending continues, the remaining balance could be completely depleted by 2026.
The resources that had enabled the Russian economy to grow for two years under conditions of war and sanctions have been exhausted,’ – Governor of the Bank of Russia Elvira Nabiullina.”
Russia is also grappling with surging inflation, which hit 8.3% in May — more than double the Bank of Russia’s 4% target. Food prices have risen sharply across the country, with Rosstat reporting year-on-year price hikes of 42% for potatoes, 30% for carrots, and 35% for onions.
Other staples such as cabbage, sugar and eggs have also seen steep increases, placing further pressure on household budgets.