‘On the brink’: Amid war-driven boom and rising inflation, Russia’s economy teeters near recession, says minister

NEW DELHI: Russia’s economy minister Maxim Reshetnikov made a rare admission on Thursday, warning that the country’s economy is “on the brink of going into a recession”, even as top Kremlin officials attempted to project calm at the nation’s most prominent economic summit, according to Russian media reports.Speaking at the St Petersburg International Economic Forum, a high-profile event intended to showcase Russia’s economic strength and attract global investors, Reshetnikov cautioned that current data signals a worrying slowdown.“The numbers indicate cooling, but all our numbers are (like) a rearview mirror,” Reshetnikov was quoted as saying by Russian business outlet RBC. “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.”The comments come amid mounting pressure on Russia’s war-fueled economy, which has defied earlier predictions of collapse under Western sanctions. High military spending has kept growth alive and unemployment low, even as inflation surges. Wage hikes and recruitment bonuses for soldiers, along with death payouts, have injected cash into poorer regions, keeping demand steady.Still, economists warn that Russia’s militarized economy is dangerously unbalanced.

With foreign investment drying up and growth largely confined to defense sectors, the risk of long-term stagnation looms large.Reshetnikov was blunt: “Going forward, it all depends on our decisions.”But other officials at the forum struck a more optimistic tone. Finance Minister Anton Siluanov admitted the economy was “cooling,” but brushed off concerns by saying, “After any cooling, the summer always comes.” Meanwhile, Central Bank Governor Elvira Nabiullina insisted the economy was simply “coming out of overheating.”