Russian Billionaires Break Silence on Central Bank's 'Zabotkin's Trap'

Russian billionaires publicly criticize the central bank's high interest rates, likening current policy to past U.S. measures. Economic growth is expected to slow significantly due to these rates, sanctions, and an overvalued rouble. Businessmen's support for the war in Ukraine is waning amidst decreased profits and rising taxes.

In an unprecedented move, some of Russia's wealthiest businessmen have publicly criticized the central bank's stringent monetary policy. One billionaire described it as a 'trap' for the economy, marking the highest-level critique of financial authorities since the rate hike in 2024.

Economic growth is projected to taper to 0.4% this year, a significant drop from last year's 4.9%, impacted by high rates, an overvalued rouble, and Western sanctions. Despite previously backing President Vladimir Putin's war in Ukraine, the prolonged conflict is testing the business community's resolve amid falling profits and rising taxes.

Prominent figures, including Roman Trotsenko and Alexei Mordashov, voiced their concerns at Russia's major economic conference, comparing central bank policies to historic U.S. rate hikes. As domestic demand shrinks, the conference underscored growing tensions between economic objectives and political realities.