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Russia to Cut Growth Outlook as Putin Urges 'Soft Landing'

The slowdown outpaced government assumptions, with the central bank holding elevated rates to contain inflation.

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Russlands Präsident Wladimir Putin.
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Overview

  • Economic Development Minister Maxim Reschetnikow said the official growth forecast will be lowered soon from the April target of about 2.5%.
  • At the Vladivostok forum, Sberbank chief German Gref said the second quarter amounted to a technical recession and that July and August data show growth nearing zero.
  • German Gref called for a substantial reduction in borrowing costs, suggesting a key rate near 12% to revive activity.
  • President Vladimir Putin rejected talk of stagnation and opposed a rapid rate cut, saying the priority is a careful path that reins in prices.
  • The Bank of Russia lifted its key rate to a record 21% to tackle inflation and has since reduced it to 18%, as defense-driven output contrasts with weaker civilian sectors.