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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High tariffs are expected to remain a core feature of Donald Trump's trade policy even after new trade agreements are reached, according to several current and former advisers who spoke with Reuters.
The U.S. Embassy in Kyiv has shared a warning about a possible air attack that could happen in the next few days.
U.S. President Donald Trump had a "very good and productive" phone call with Ukrainian President Volodymyr Zelenskiyy on Thursday, according to the White House.
Prime Minister Keir Starmer is set to unveil fresh sanctions targeting up to 100 Russian oil tankers used to evade international restrictions, in a bid to cut off funding for Vladimir Putin's war in Ukraine.
China has agreed to send its top economic official for rare trade talks with the U.S. in Geneva, as deepening economic troubles and geopolitical frictions force Beijing back to the negotiating table.
High tariffs are expected to remain a core feature of Donald Trump's trade policy even after new trade agreements are reached, according to several current and former advisers who spoke with Reuters.
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Prime Minister Keir Starmer is set to unveil fresh sanctions targeting up to 100 Russian oil tankers used to evade international restrictions, in a bid to cut off funding for Vladimir Putin's war in Ukraine.
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