Russia ‘On the Brink Of’ Recession Says Economy Minister

Russian Economic Minister Maxim Reshetnikov

Russia’s economy, buoyed for months by wartime spending, may now be teetering toward recession, Minister of Economic Development of the Russian Federation Maxim Reshetnikov said on Thursday, according to Russian media reports.

Speaking at the annual St. Petersburg International Economic Forum, Reshetnikov said: “The numbers indicate cooling, but all our numbers are [like] a rearview mirror.”

“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, he added, according to business news outlet RBC.

Minister of Economic Development of the Russian Federation Maxim Reshetnikov attends a plenary session of the St. Petersburg International Economic Forum in St. Petersburg, Russia, on June 19, 2025.

Roscongress Foundation via AP

Why It Matters

The warning marks a significant shift as Russia faces the consequences of prolonged war-related spending, global sanctions and continued international isolation. For American policymakers and businesses, economic instability in Russia carries potential implications for global markets, energy prices, and ongoing geopolitical tensions, especially as sanctions and Russia’s military operations in Ukraine continue to reshape the international economic landscape.

What To Know

Since sanctions were imposed following the invasion of Ukraine in February 2022, Russia’s economy had outperformed early predictions. High levels of defense spending supported growth and kept unemployment rates low even as inflation worsened. Wages rose with inflation, benefiting many workers in the short term.

Large signing bonuses for military recruits and death benefits for soldiers killed in Ukraine put additional money into poorer regions of Russia. However, economists have warned that the prolonged focus on military sectors, inflation, and a lack of foreign investment are increasing long-term risks and stagnation in other economic sectors.

At Thursday’s event in Russia’s second-largest city, intended to showcase the country’s economic achievements and court foreign investors, Reshetnikov addressed Central Bank Governor Elvira Nabiullina, saying he wanted to give “the economy some love,” according to Reuters.

Nabiullina downplayed fears, claiming Russia’s economy was “coming out of overheating,” according to RBC.

Finance Minister Anton Siluanov also offered a more optimistic view, stating the economy was “cooling” but adding, “after any cooling, the summer always comes.”

What People Are Saying

Russian Economy Minister Maxim Reshetnikov said, according to Reuters: “I didn’t predict a recession. I said we’re on the brink. From here on out, everything will depend on our decisions.”

Russia’s Center for Macroeconomic Analysis and Short-Term Forecasting said in a statement this week: “It seems that an ‘an economy of stagnation’ has formed.”

What Happens Next

The trajectory of Russia’s economy will depend on forthcoming government and central bank actions as officials weigh responses to the cooling economic environment. Further policy announcements or economic data are expected to clarify whether Russia can avoid a formal recession designation in the coming months.

This article includes reporting by The Associated Press

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