The Russian economy may enter a recession by the end of this year.
A wide-ranging debate has emerged among economists close to the Kremlin regarding the high likelihood that Russia's economy may enter a recession phase by the end of this year. Zamin.uz reported on this matter.
Russian media outlets have covered this issue in recent days, with the primary source of information being data published by the Izvestiya newspaper. This conclusion is based on an in-depth report prepared by the Center for Macroeconomic Analysis and Short-Term Forecasting, which maintains close ties with the Presidential Administration.
This center has developed a special composite leading indicator to assess the current state of the economy and identify the risk of entering a recession. According to the study results, this indicator reached 0.49 in December of last year, which is significantly higher than the zero point.
This indicates a significant exceedance of the critical threshold of 0.18, which signals the presence of recession risks. The authors of the report warned that if a recession begins, it is unlikely to be short-term and could last for more than a year.
Discussions indicate that the growth rate of the Russian economy is already slowing down under the influence of several negative factors. These factors include high key interest rates in the country, a tightening and more cautious budget policy, labor shortages, and a pause in investment activity.
Although the government continues to support certain sectors, these pressures are limiting the overall expansion of the economy. According to financial analysts, if oil prices drop sharply or a new wave of international sanctions related to the war in Ukraine intensifies, the risk of recession will increase further.
Additionally, a new wave of inflation may force the Central Bank to delay reducing interest rates. Currently, economic growth is primarily driven by state orders and the military-industrial complex.
Since private investment and household consumption remain weak, if these problems intensify in the near future, the economy could face a prolonged and severe recession.
