Russia's economy is 'sustainable and balanced' despite global uncertainty, minister says

Russia’s Minister of Economic Development, Maxim Reshetnikov, rejected Western claims of an economic crisis during an interview at the St Petersburg International Economic Forum. He highlighted over 10% growth in the Russian economy over the past three years, though inflation has slowed growth this year. The 2026 budget is based on Urals crude priced at $59 per barrel, with a $150 billion national welfare fund to cover shortfalls when prices fall below that threshold. Despite sanctions, Russia’s budget deficit shrank to 1.7% of GDP in 2024, down from 3.4% in 2023, as oil revenue surged. Reshetnikov emphasized that Russia’s growth model has shifted to internal demand, including population consumption and state investment, reducing reliance on exports. The rouble’s strength stems from high exports, limited imports, and reduced capital outflows, he said, while noting a push for de-dollarization in trade and finance. Real disposable incomes rose 7.3% in 2024 and 4.1% in early 2025, outpacing inflation, which peaked near 9% late last year. The minister dismissed the Strait of Hormuz crisis as temporary, stating it does not factor into long-term economic planning. Instead, Russia is focusing on productivity gains, including doubling the annual overtime limit to 240 hours and expanding remote work to address labor shortages. He acknowledged that the labor market remains the biggest constraint on economic growth. Reshetnikov also downplayed concerns about global instability, suggesting globalization will become more fragmented rather than disappear entirely. The government continues to support low-income families through targeted payments funded by oil and resource revenues, ensuring sustained real income growth.