Russia's Putin rejects cautions about stagnating economy from top bankers

President Vladimir Putin has dismissed sentiments from Russia’s most prominent banker that the country’s economy is slipping into ￰0￱ defended the central bank’s high interest rate policy, claiming it would control inflation amid rising ￰1￱ Gref, chief executive of state-owned Sberbank PJSC, warned on Thursday that Russia’s economy had entered a “technical recession” in the second ￰2￱ told the Eastern Economic Forum in Vladivostok that data from July and August showed “quite clear symptoms that we are approaching zero growth.” When asked at the forum on Friday if he shared the banker’s assessment, Putin’s response was “No.” The Russian head of state admitted that some officials within the government raised similar points to Gref, but insisted that the central bank’s restrictive stance was necessary to avoid a surge in inflation.

“We need to ensure a soft calm landing of the economy,” Putin told the local press earlier ￰3￱ rates clock highs, but inflation is steady Gref, who leads Russia’s largest lender, asked policymakers to slash borrowing costs, arguing that high interest rates were suffocating businesses and households. “Given the current level of inflation, recovery can only be expected when the rate is at 12% or lower,” he asserted. Sberbank’s internal forecasts predicted the benchmark rate would average around 14% by the end of the year, which, according to the banker, is still too high for businesses to ￰4￱ September, the Russian central bank raised its key rate to 21%, the highest in two decades, as inflation accelerated on the back of war spending and supply ￰5￱ Trading Economics data , Russia’s annual inflation eased to 8.8% from 9.4% in June, the lowest level since October ￰6￱ policymakers have since reduced borrowing rates to 18%, they are more reluctant to make steeper ￰7￱ say military expenditures and state spending are threatening to bump inflation ￰8￱ supports Bank of Russia decisions, but ministers are doubtful Putin has stood behind Central Bank Governor Elvira Nabiullina despite the discontent of several industrialists and ￰9￱ Kremlin sees inflation as riskier than stagnation, with the president warning economists that unchecked price growth would harm ordinary Russians more severely than slower output.

“Some believe that hypothermia has already come, but lending has not stopped,” Putin said on Friday. “The pace has slowed down, I know, in some industries, the situation is not easy,” he added Members of his cabinet, like Economic Development Minister Maxim Reshetnikov are saying the economy was “cooling down faster than expected,” which could mean revised forecasts would be submitted ￰10￱ Minister Anton Siluanov told Putin last week that next year’s growth projections had been cut to 1.5% from 2.5%, with some internal estimates closer to 1.2%. And according to independent analysts looking at the data, the Kremlin is running out of room to ￰11￱ for oil revenues inside the war Politico reported this week that Ukrainian drone strikes have been targeting Russian oil storage and pumping facilities, causing domestic shortages and undermining ￰12￱ barrage of attacks has compounded the impact of falling global crude prices, leaving Moscow’s most important industry under siege.

“For the Kremlin, a brief period of low growth is tolerable, though combined with lower oil prices, it would reduce fiscal revenues,” Kolyandr continued, “On the other hand, if the government doesn’t reduce fiscal support, there’s a risk high inflation will return.” The smartest crypto minds already read our ￰13￱ in? Join them .