The Russian economic system slipped into “technical stagnation” within the second quarter of 2025, shifting to zero progress in July and August, Russiaʼs Sberbank CEO Herman Gref mentioned on the Jap Financial Discussion board (EEF) in Vladivostok on Sep. 4.
Russia’s Sberbank is a Russian main state-owned financial institution and monetary providers firm headquartered in Moscow.
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Gref blames the Russian Central Financial institution’s 18% key charge for slowing down the economic system. It reached its peak in October 2025, when the Central Financial institution raised it to 21% to combat rising inflation. Since June it has been lowering, however nonetheless stays “one of many highest on the planet,” Gref mentioned.
Russia’s annual inflation fell for the fourth month in a row to eight.8% in July 2025, the bottom since October final 12 months, down from 9.4% in June, Russian Central Financial institution’s data exhibits.
Sberbank expects the important thing charge to face close to 14% by year-end, however Gref argued that actual restoration requires 12% or decrease, Russiaʼs Interfax reported.
“With the present degree of inflation, the speed at which we will anticipate the economic system to revive is 12% or decrease,” Gref mentioned. “So as soon as we attain these ranges, we’re prone to see an financial restoration.”
The rate of interest in Russia additionally stays one of many highest globally, Gref mentioned. A lower of at the least 200 foundation factors might permit financial institution lending to renew regular progress within the second half of 2025, he mentioned.
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“You will need to exit the interval of managed cooling of the economic system in order that it doesn’t flip into stagnation. Restarting the economic system later will probably be a lot tougher than cooling it down,” Gref mentioned.
In accordance with Gref, Russian specialists and companies are calling for all out there instruments to help progress. A chronic pause in funding, he added, might weigh on the economic system for the following two to 3 years.
Gref highlighted geopolitical tensions, rates of interest, trade charge stress, and a cyclical decline in commodity costs, which make up the majority of Russian exports.
“Financial coverage is not only science, it’s artwork,” he mentioned. “It’s essential to stability these elements so the economic system doesn’t come to a sudden halt.”
Russia is working out of the sources which have supplied its financial progress for the previous two years following the full-scale invasion of Ukraine, the pinnacle of the Central Financial institution of Russia, Elvira Nabiullina, mentioned in the course of the St. Petersburg Worldwide Financial Discussion board on June 19.
Now, the Russian economic system is further weakening attributable to falling oil costs, price range constraints, and rising company debt. The scenario can be difficult by a weak nationwide forex and excessive rates of interest. Nabiullina mentioned the nation has to seek for new financial fashions.
Nevertheless, the share of firms experiencing labor shortages has been declining, based on Russia’s central financial institution. The variety of industrial enterprises reporting to be totally staffed has gone up in addition to that of enterprises which have lowered the variety of work shifts – however, for now, it’s unknown whether or not it should affect the general financial scenario.
Russia’s central financial institution is observing a downward pattern in inflation, though inflation expectations are nonetheless excessive, Nabiullina mentioned in the course of the briefing on June 6.
