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Investing.com -- Sberbank CEO German Gref warned Thursday that Russia’s economy is stagnating and could fall into recession unless the central bank makes deeper interest rate cuts.
Despite Russia’s war economy growing at 4.1% in 2023 and 4.3% in 2024 - outpacing G7 countries even under Western sanctions imposed after the Ukraine invasion - Gref described the second quarter as showing signs of "technical stagnation."
The central bank has already reduced rates to 18% after cuts in June and July, but Gref, who previously served as economy minister, suggested the anticipated reduction to 14% by year-end would be insufficient. He argued rates would need to drop to 12% for economic recovery.
"It is important to move out of this period of controlled cooling of the economy so that it does not turn into stagnation, because reviving the economy will be much more difficult than cooling it down," Gref said.
The banker noted that data collected from banks, which arrives faster than official government statistics, revealed a sharp economic slowdown with growth approaching zero in July and August.
His comments join a series of warnings from senior Russian officials about the economy struggling under high credit costs despite sanctions.
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