Sberbank CEO Warns: Russia's Economy on Brink of Recession Without Urgent Rate Cuts

Sberbank CEO German Gref alerts that Russia's economy is stagnating and warns of an imminent recession unless central bank slashes interest rates. Despite past growth, high military spending has inflated rates, crippling borrowing. Stakeholders urge rate cuts to spur revival amid cooling demand and economic slowdown.

The Sberbank CEO German Gref, a pivotal figure in Russia's banking sector, cautioned on Thursday about the stagnant state of the economy. He emphasized the need for drastic interest rate reductions by the central bank to avoid an impending recession.

Despite Russia experiencing significant economic growth in recent years, thanks to its wartime economy, high levels of military expenditure have inflated interest rates. This has created a challenging borrowing environment, leading to a series of warnings from authorities about the potential for economic stagnation.

Speaking at the Eastern Economic Forum in Vladivostok, Gref advocated for a reduction in rates to approximately 12% to facilitate recovery. The discourse highlighted pressing concerns about the nation's economic trajectory, urging immediate action from the central bank ahead of its critical rate decision meeting in September.

(With inputs from agencies.)