Russian President Vladimir Putin on Tuesday cautioned his economic team against overcooling the national economy through overly tight monetary policies ahead of the central bank's impending rate decision.
Speaking to a congress of a prominent Russian business lobby during a so-called “silence week” – when the central bank refrains from public comment on its upcoming decision – Putin warned that excessive cooling could stifle economic activity, likening such a scenario to freezing the economy in a "cryotherapy chamber."
All 29 economists polled by Reuters expect the central bank to keep its key interest rate on hold at 21%, the highest level in over 20 years, in an effort to rein in inflation. However, several experts and advisors have noted that aside from the defense sector, much of the Russian economy is already stagnating, with critics arguing that the central bank's stringent policies are choking off investment.
"It is clear that this (cooling) is inevitable. Both the government and the central bank have generally talked about it. Overall, there seems to be an agreement," Putin said, acknowledging the challenges of maintaining economic stability under current measures. He further stressed, "It's essential that everything proceeds as planned in practice, avoiding excessive cooling like in a cryotherapy chamber," drawing an analogy to a wellness treatment where individuals are exposed to extreme cold, sometimes as low as -140 degrees Celsius.
The central bank's recent decisions have sparked debate among economists and business leaders alike. Last December, it surprised analysts by unexpectedly keeping rates unchanged after Putin had called for a “balanced” approach just one day prior to the board meeting. Rates were held steady again in February, reinforcing the administration’s cautious stance.
Looking ahead, the central bank forecasts that Russia's economic growth will slow to between 0.5% and 1.5% in 2025 as a result of its restrictive monetary policy, while the government is projecting growth of around 2.5%. Critics argue that the tight policy is stifling investment without effectively lowering inflation. "Today, investment programs have practically come to a standstill," said Sergei Chemezov, head of the defense and industrial conglomerate Rostech and a longtime friend of Putin.
As the central bank prepares to announce its decision on Friday, the balancing act between curbing inflation and avoiding further economic stagnation remains a key challenge for Russian policymakers.
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Jordan's King Abdullah II and Egypt's President Abdel Fattah al-Sisi held a phone conversation on Saturday to discuss ongoing efforts to end the Israeli war on Gaza, which has been ongoing since October 7, 2023.
President Vladimir Putin’s announcement of a temporary Easter ceasefire in Ukraine has drawn strong criticism from Kyiv, as Ukrainian leaders question the sincerity behind Moscow’s gesture amid continued hostilities and deep mistrust.
President Volodymyr Zelenskyy has denounced a Russian drone strike that occurred just hours after the start of a declared Easter truce, calling it proof of Vladimir Putin’s blatant disregard for both the holiday and human life.
Hamas claims it has lost contact with the group holding Edan Alexander, a U.S.-Israeli soldier, after an Israeli airstrike reportedly killed one of his guards.
Tehran and Washington have wrapped up their second round of nuclear talks, aiming to revive stalled diplomacy and explore the path to a potential agreement.
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