Kremlin Downplays Economic Strain as Business Sentiment Sours

Dmitry Peskov described the mounting challenges as non-critical, framing the administration’s response as a steady effort to mitigate volatility. However, the latest data from the Central Bank of Russia contradicts this narrative of calm, revealing that businesses are increasingly pessimistic about the near future while simultaneously bracing for higher costs.

Economist Yevgeny Kogan views these shifts through a more cautious lens, pointing to the dual threats of stubborn inflation and localized fuel shortages. He warns that the economy faces the specter of stagflation, a condition that forces policymakers into a narrow corridor. Navigating this environment will likely demand painful trade-offs between aggressive interest rate hikes and the need to stimulate stagnating business activity.