Russia’s Economy Hits the Brakes—Hard—as Minister Sounds Alarm

Moscow’s economic engine is stalling faster than a Lada in winter—and even the Kremlin’s top money wrangler can’t ignore the freeze.

The cold hard numbers

No official stats were provided (classic move), but when the Economy Minister publicly frets about ’excessive cooling,’ you know the GDP’s probably shivering.

Sanctions? What sanctions?

Three years into the West’s financial deep-freeze, Russia’s ’fortress economy’ looks more like an igloo with foundation issues. But hey—at least oligarchs can still buy yachts with crypto.

Bottom line

When your economic warning comes wrapped in bureaucratic understatement, it’s time to short the ruble—or go long on vodka stocks.

Signs of cooling demand in Russia are already visible

A Russian Railways planning paper last week showed major exporters, including aluminum group Rusal and oil producer Gazpromneft, cutting the volumes of metals and oil products they intend to MOVE by rail. The document points to weaker sales at a time when the broader economy is slowing.

Many factories say the 21 percent borrowing cost is too high and have trimmed investment plans. The ministry foresees gross domestic product expanding by 2.5 percent this year, compared with the central bank’s own forecast of 1 to 2 percent. The next rate-setting meeting falls on 6 June.

The central bank, for its part, has said it will weigh incoming data but warns that an early cut could reignite price growth if households rush to spend savings and if the ruble comes under new pressure from sanctions or falling export revenues.

While economic debate intensifies at home, Russia has shown little interest in peace talks with Ukraine. Military analysts describe recent short “ceasefires” as performative, and efforts by U.S. President Donald TRUMP to draw President Putin into negotiations have failed.

Instead, Moscow is widely expected to launch a fresh summer offensive aimed at securing more ground in the south and east of Ukraine, areas its forces partly occupy. Success on the battlefield could strengthen Russia’s hand in any eventual talks.

Even so, growing pressures, from securing enough weapons to coping with sanctions on exports like oil that generate a major portion of the revenue, may pull the Kremlin toward the negotiating table.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot