Nabiullina: Russian economy stable – no signs of recession!

Nabiullina: Russian economy stable – no signs of recession!

In a recent statement on Russia's economic situation, Elvira Nabiullina, the head of the Russian Central Bank, made it clear that her institution sees no signs of a prolonged recession. This assessment is no coincidence, as Nabiullina emphasizes that rising unemployment and falling wages do not represent negative indicators in the sense of an economic downturn. “We are observing a positive development,” says Nabiullina, who also points out the low unemployment rate that is registered in Russia and even leads to a shortage of personnel. This is a sign of a stable employment situation that is not associated with a classic recession, in which one typically sees sharply rising unemployment. According to Nabiullina's statements, which are also supported by President Vladimir Putin, we are not in a typical “economic slowdown”, but are experiencing a temporary technical phase.

Nabiullina's assessment takes on additional importance in light of recent developments in monetary policy. On October 24, the central bank lowered the key interest rate by 0.5 percentage points to 16.5 percent per year. This measure comes as part of a long-term strategy to combat inflation, which it has identified as a key problem for low-income citizens. The Bank of Russia plans to continue this cycle of cutting key interest rates until the end of 2026, but emphasizes the need to avoid premature easing of monetary policy, which could potentially lead to a new rise in interest rates.

Economic challenges and solutions

At a plenary session of the State Duma, Nabiullina also cautiously rejected calls to freeze citizens' savings and stop interest payments, which she called "complete nonsense." She stressed that such alarming claims are not consistent with responsible economic analysis. “Professional economists do not take such scenarios seriously,” she said, while defending the central bank’s chosen anti-inflation measures.

To further curb inflation, the central bank plans to reduce the inflation rate to the target of 4 percent in 2027. Nabiullina expressed confidence that the government will be able to contain the rise in gasoline prices without further fueling inflation rates. Nevertheless, the situation is tense given an increased key interest rate, which has been raised to a record 21 percent. This also means higher loan interest rates, for example for mortgages, which raises increasingly important questions about financial viability.

About Elvira Nabiullina

Elvira Nabiullina is not only a central figure in the Russian financial world, but also the first woman to head a central bank in Russia and among the G8 countries. Her career is remarkable: she was named the best central bank chief in the world by Euromoney in 2015 and regularly appears in lists of the most influential women in the world. This year, Bloomberg again highlighted her work, calling her one of the most renowned central bankers globally. In addition to her career, Nabiullina is interested in classical music and plays the piano passionately. In her personal life, she is married and has a son named Vasily, and Olivier salad is one of her culinary preferences at New Year's.