The Kremlin does not consider the difficulties facing the Russian economy to be critical, and believes that the overall situation remains stable. This was stated today by Kremlin spokesman Dmitry Peskov, quoted by Reuters, BTA reported.
„The difficulties that our economy is going through are well known to everyone. These difficulties are not of a critical nature“, Peskov told the media.
„The government and the president regularly discuss them and understand what needs to be done to regulate and improve the situation. Macroeconomic stability is fully preserved,” he added.
Peskov’s comments came after the Russian Central Bank published the results of its monthly business survey yesterday, which showed a sharp deterioration in companies’ sentiment.
The central bank’s business climate indicator fell by 4.5 points in July to minus 3.6 points, its lowest level since mid-2022. At the same time, companies’ price expectations rose significantly after declining for five consecutive months.
Evgeny Kogan, an investment banker and professor at the Higher School of Economics in Moscow, noted that since similar data became available in 2002, only five months have seen the business activity indicator deteriorate more sharply. He said that the indicator's move into negative territory has historically been associated with economic crises.
Kogan also pointed out that rising inflation expectations indicate a sharp increase in spending amid fuel shortages caused by the intensification of Ukrainian strikes on Russian oil refineries.
“The fuel crisis can simultaneously accelerate price growth and push the economy into recession. Such a situation is called stagflation“, Kogan wrote on his Telegram channel.
“If the interest rate is raised to control inflation, it can finish the economy. If the rate is lowered to support business activity, price growth will accelerate even more and become increasingly difficult to control. "Something will have to be sacrificed," he said.
According to Rosstat, Russian inflation reached 6 percent in June on an annual basis.