Russia's economy is on the verge of recession! If no action is taken soon, it will be difficult to avoid recession

Russia's economy is on the brink of collapse. Economy Minister Maxim Reshetnikov made the announcement at the St. Petersburg International Economic Forum on Thursday. At the same time, he warned that if no steps are taken soon, it will be difficult to avert a recession. After the year 2022, Russia has cut interest rates this month. With this, the cost of borrowing has come down from 21 per cent to 20 per cent. The aim is to boost investment by reducing the cost of borrowing. However, it is still not much less, so businessmen are hesitant to take loans. Over the past several months, high interest rates have led to a decline in investment, which has slowed down economic growth. Meanwhile, Central Bank Governor Elvira Nabiullina said that the situation of businesses here shows that we are already on the brink of a recession. Alexander Vedyakhin, first deputy CEO of Russia's largest bank, Sberbank, told Reuters in an interview this week: "Russia's tight monetary policy is creating a recession risk for the economy here. He suggested that an interest rate of 12-14 per cent could be useful to boost investment. The war with Ukraine is the second biggest reason for the recession in Russia. This has led to an increase in price. Tensions between the two countries have been simmering for the past three years. Due to this war, interest rates have been increased so that inflation remains under control. But despite this, inflation remains close to 9.5 percent in 2024 and 9.8 percent in 2025. The prices of onion, potato and other vegetables have also gone up. Many people are leaving the country due to the lockdown. This has led to a huge shortage of labour. People are migrating in search of better opportunities. This affects crop production.