Sber CEO Herman Gref has called for deeper interest rate cuts to spur recovery and avert a recession
The Russian economy is losing steam and needs lower borrowing costs to restore growth, Herman Gref, CEO of the country’s biggest lender Sber, has warned.
Since the escalation of the Ukraine conflict in 2022, Russia has operated under sweeping Western sanctions aimed at isolating the country. Despite the restrictions, the economy has shown resilience, often outperforming forecasts. While GDP expanded by 4.1% in 2023 and 4.3% in 2024, the Economic Development Ministry is projecting growth to slow to 2.5% this year. The central bank, in its medium-term forecast, was even more cautious, projecting growth of 1–2%.
Speaking at the Eastern Economic Forum (EEF) in Vladivostok on Friday, Gref said that the key interest rate was likely to be cut from the current 18% to around 14% by year-end; however, he argued that this would be insufficient. At current inflation levels the economy could only recover at 12% or lower, he stressed.
Gref described the second quarter (April-June) as a period of “technical stagnation” and urged timely measures to avoid slipping into a recession. “It is important to exit the period of managed cooling of the Russian economy in time,” Gref said.
A weaker ruble toward the end of the year could ease risks for exporters and support the budget, the banker added.
Gref’s concerns were echoed by Economic Development Minister Maksim Reshetnikov, who told the EEF that growth momentum was weakening faster than expected and that the ministry was revising its forecasts. Earlier this year, Reshetnikov cautioned that the country was close to recession and said the outcome would depend on policy choices, particularly interest rates.
Russian President Vladimir Putin warned that sharp cuts to the key rate could trigger higher prices, while expressing confidence that inflation – currently estimated at 8.8% – could be brought down to a minimum while keeping the economy on an upward trajectory.
The Bank of Russia will hold its next policy meeting on September 12. The regulator has signaled it could reduce the rate to 10.5% next year if inflation falls to 4%.
