From “hypothermia” her economy is in danger Russiaas the Minister of Economy, Maxim Resetnikov, said today (26.5.2025), as he called her Central Bank To keep in mind the slowdown in inflation when it meets to set interest rates next week.
Fighting with the persistent high inflation, Russia’s central bank has maintained the main interest rate from October to 21%, an attitude that has stifled investments precisely because the financial support provided by the rapidly growing military spending begins to decline.
The Russian government usually has a united front on policy issues, but high interest rates, huge budget costs and the effectiveness of capital controls have led to public disagreements in recent years.
In August 2023, the Central Bank proceeded to an unplanned increase in the interest rate by 350 basis points, the day after the public reprimand he received from President Vladimir Putin’s then financial adviser, Maxim Oreskin, who accused her mild monetary policy.
Then in March of this year, Putin urged officials of the economy not to freeze Russia’s economy as if it were “in a cryotherapy room” with high borrowing costs, which many analysts interpreted as a call for a relaxation cycle.
Speaking today in the state dumm (Lower House of the Russian Parliament), Resetnikov said that inflation in recent weeks was at 3-4% when it was re-calculated on a yearly basis.
“We expect the May figures depicting this trend, and of course we expect the central bank to take it duly in mind when it makes its decisions, because we too are seeing risks of economic hypothermia under the present situation,” Resetnikov said.
The ministry provides for annual inflation for 2025 at 7.6%, an estimate that Reestnikov described as “realistic”.
Russia’s major exporters including Rusal and Gazpromneft have limited their planned quantities of products such as metals and oil products they send in rail, according to a Russian railway document that Reuters saw last week, which proves its real impact.
Many businesses in the industrial sector complained about the prohibition costs and many have reduced its investment plans. The Ministry of Economy provides for economic growth of 2.5% for this year, compared to the central bank’s provision for 1-2%.
The next meeting of the Central Bank to set interest rates is scheduled for June 6.