{"id":132402,"date":"2025-09-04T14:15:13","date_gmt":"2025-09-04T14:15:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/132402\/"},"modified":"2025-09-04T14:15:13","modified_gmt":"2025-09-04T14:15:13","slug":"sberbank-warns-of-near-zero-growth-united24-media","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/132402\/","title":{"rendered":"Sberbank Warns of\u00a0Near-Zero Growth \u2014 UNITED24 Media"},"content":{"rendered":"

Russia\u2019s economy has slowed to\u00a0a\u00a0near standstill, with Sberbank CEO Herman Gref warning of\u00a0\u201ctechnical stagnation\u201d and GDP growth approaching zero, signaling mounting pressure on\u00a0industries and households alike.<\/p>\n

Sep 04, 2025 14:33<\/p>\n

Updated Sep 04, 2025 15:39<\/p>\n

\n 3 min read\n<\/p>\n

Authors
\n \"Photo<\/p>\n

Russia\u2019s economy slowed sharply in\u00a0the second quarter of\u00a02025, entering what Sberbank CEO Herman Gref described as\u00a0a\u00a0period of\u00a0\u201ctechnical stagnation,\u201d raising alarms about the country\u2019s near-term growth prospects, Russian media RBC reported on\u00a0September\u00a04.<\/p>\n

Speaking<\/a> at\u00a0the Eastern Economic Forum (EEF), Gref said the cooling trend is\u00a0visible in\u00a0GDP figures, with July and August showing \u201cclear symptoms\u201d of\u00a0growth approaching zero.<\/p>\n

\u201cThe second quarter can practically be\u00a0considered technical stagnation. July and August show fairly obvious signs that we\u00a0are approaching zero,\u201d Gref said.<\/p>\n

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Gref stressed the importance of\u00a0timely exiting the period of\u00a0managed economic slowdown, noting that reviving growth afterward would be\u00a0challenging.<\/p>\n

He\u00a0highlighted the Central Bank\u2019s key interest rate as\u00a0a\u00a0critical tool, predicting it\u00a0could fall to\u00a014% by\u00a0year-end.<\/p>\n

\u201cIs\u00a0this enough to\u00a0get the economy moving again? In\u00a0our view, it\u2019s\u00a0not. At\u00a0current inflation levels, the rate needed to\u00a0hope for economic revival is\u00a012% or\u00a0lower,\u201d he\u00a0said, expressing hope the central bank would prevent a\u00a0slide into full recession.<\/p>\n

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Sharp decline across sectors<\/p>\n

The economic boom Russia experienced during its military buildup in\u00a0previous years has largely dissipated in\u00a02025. According to\u00a0the Ministry of\u00a0Economic Development, GDP growth in\u00a0July was just 0.4% year-on-year.<\/p>\n

This marks a\u00a02.5-fold slowdown compared with June (1%) and an\u00a0elevenfold drop compared with December 2024 (4.5%).<\/p>\n

Industry is\u00a0teetering on\u00a0stagnation, with overall growth of\u00a00.7%, while several sectors have plunged into deep contraction:<\/p>\n

Food production fell 1.1% between January and July, and freight transport dropped 1.5%.<\/p>\n

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The Ministry initially forecast 2.5% GDP growth for 2025, later revising it\u00a0down to\u00a01.5%. The Central Bank expects 1\u20132% growth, while the IMF projects Russia will slow from 4.3% in\u00a02024\u00a0to\u00a00.9% this year.<\/p>\n

Central bank interest rate adjustments<\/p>\n

In\u00a0June, the Central Bank cut its key rate for the first time in\u00a0three years, from 21% to\u00a020%, and further lowered it\u00a0to\u00a018% in\u00a0July.<\/p>\n

Officials cited faster-than-expected reductions in\u00a0inflationary pressure but emphasized the need to\u00a0maintain tight monetary policy to\u00a0return inflation to\u00a0target levels. The bank anticipates the average key rate will be\u00a012\u201313% in\u00a02026, falling to\u00a07.5\u20138.5% in\u00a02027\u20132028.<\/p>\n

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Divergent views among officials<\/p>\n

Gref\u2019s assessment aligns with Andrei Klepach, chief economist at\u00a0VEB.RF, who noted that Q2 2025\u00a0GDP fell 0.6% when accounting for seasonal and calendar factors. Two consecutive quarters of\u00a0GDP contraction are typically classified as\u00a0a\u00a0technical recession.<\/p>\n

In\u00a0contrast, Finance Minister Anton Siluanov has projected a\u00a0more optimistic outcome, telling Russian leader Putin that 2025\u00a0GDP growth will reach at\u00a0least 1.5%. Putin himself described the situation as\u00a0a\u00a0\u201cbalanced growth\u201d trajectory and expressed confidence that the Central Bank is\u00a0maintaining control.<\/p>\n

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Growing concerns<\/p>\n

According to\u00a0Gref, Russian bankers were quietly expressing concern about worsening conditions, warning of\u00a0a\u00a0potential banking crisis within a\u00a0year. The slowdown is\u00a0widespread and persistent, with the economy struggling to\u00a0meet even the most conservative official forecasts.<\/p>\n

Gref added that Sberbank regularly shares early macroeconomic data with authorities, warning that without careful monitoring and timely policy adjustments, the country risks tipping into a\u00a0recession.<\/p>\n

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Earlier, Russia\u2019s manufacturing sector contracted<\/a> in\u00a0July at\u00a0the fastest rate since the early days of\u00a0its full-scale war against Ukraine.<\/p>\n

The S&P Global Purchasing Managers\u2019 Index (PMI) for Russian manufacturing fell to\u00a047.0 in\u00a0July from 47.5 in\u00a0June, moving further below the 50-point threshold that signals contraction. This marks the sharpest monthly decline since March 2022.<\/p>\n

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