Russia’s Sberbank CEO says economy stagnates, warns of recession

Sberbank CEO German Gref told the Eastern Economic Forum in Vladivostok that July and August data show the economy “moving toward zero growth.” He blamed a mix of geopolitical pressures, a volatile ruble and falling commodity prices, all of which have slowed business activity, RBC reported.

Interest rates choke growth

Gref pointed to the Central Bank’s key rate of 14% as the biggest drag on the economy, arguing that credit markets cannot recover unless the rate falls below 12%. “It’s not just the nominal rate that matters, but the real rate — and in Russia it’s one of the highest in the world,” he said.

Credit outlook

Sberbank expects lending to resume only in the second half of 2025, and only if monetary policy is eased by at least 200 basis points. High borrowing costs are already weighing on both businesses and consumers, suppressing investment and demand.

Long-term pressures

According to Gref, sanctions, global market uncertainty and rising costs continue to squeeze Russian companies. Without a policy shift, he warned, the economy risks being stuck in stagnation for years.

IMF forecast

The International Monetary Fund projects that after two years of war-driven growth, Russia will slip back into its chronic pattern of stagnation. In its July outlook, the IMF cut Russia’s GDP growth forecast to 0.9% in 2025 and 1% in 2026, down sharply from 4.1% in 2024.

Meanwhile, analysts estimate Moscow is spending roughly half its federal budget on the war in Ukraine. U.S. Energy Secretary Chris Wright said sanctions targeting Russian oil remain a “very real possibility” as Washington looks for new ways to tighten pressure on the Kremlin.