Russian Economy Slipped Into ‘Technical Stagnation,’ Sberbank CEO Warns

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Russia’s economy slipped into “technical stagnation” in the second quarter of this year, according to Sberbank CEO German Gref, who on Thursday repeated his past warnings that the Russian Central Bank’s tight monetary policy risked tipping the country into recession.

Speaking at the Eastern Economic Forum, Gref also said that July and August data suggested growth was now approaching zero.

“One key factor, of course, is the key interest rate. According to our internal estimates [at Sberbank], the rate will be around 14%

Russia’s Central Bank had raised its key rate to a two-decade high of 21% in September 2024 to combat surging inflation, largely driven

Gref’s sense of unease was echoed

Economic Development Minister Maxim Reshetnikov said the economy was “cooling down faster than expected” and that new government forecasts would be submitted “shortly.” Finance Minister Anton Siluanov told Putin last week that growth projections for next year are down to 1.5%, from 2.5%, with some estimates pointing closer to 1.2%.

The slowdown comes as Russia’s federal finances show growing strain. In August, the Finance Ministry reported that the budget deficit reached 4.88 trillion rubles ($61.1 billion) between January and July, already exceeding the government’s full-year target.

At the same time, weaker global oil prices, a stronger ruble and mounting Ukrainian attacks on fuel storage sites have eroded export earnings.

According to Kommersant, oil and gas revenues fell for the fourth straight month in August, totaling 505 billion rubles ($6.2 billion), down 36% from July and the lowest level since mid-2025. The government has restricted some oil exports to stabilize domestic prices, further squeezing revenues.

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