Russia’s Minister of Economic Development has rejected western claims of a crisis in his country, pointing to solid growth and rising personal incomes as the economy becomes “more sustainable and balanced”.
In an exclusive interview with On The Record at the St Petersburg International Economic Forum, Maxim Reshetnikov said: “I don’t know what you mean by crisis. Over the last three years the growth of the Russian economy has been more than 10 per cent. This year [it is] maybe not so positive, because the other side of that growth was inflation. Now the main task is to lower inflation, so the real key rate is quite high and, of course, that couldn’t help but affect our growth.”
On the effect oil prices are having on Russia’s petrodollar economy, Mr Reshetnikov said the 2026 budget is built on Urals crude at $59 per barrel, a benchmark the ministry has not revealed publicly before. The current market price is $87 per barrel.
“When the oil price is above $59 we start to stock additional funds. When it’s under $59 we start spending them, the special reserve fund, which we call the Fund for National Welfare,” he said.
That fund stood at about $150 billion as of the middle of this year, with liquid assets used to cover budget shortfalls when Urals crude trades below $59. Russia’s Finance Ministry reported a budget deficit of 1.7 per cent of GDP last year, down from 3.4 per cent in 2024, as oil revenue rose despite sanctions. Urals crude has traded between $90 and $100 per barrel for much of this year after the Strait of Hormuz crisis pushed Brent crude to more than $90 and diesel margins to $37 per barrel in Europe, Goldman Sachs said.
Russia’s growth model has changed, Mr Reshetnikov said. “The main source of growth has become internal, not external. Our internal demand, the consumption of the population and the state, and investment, those are the main resources. The influence of exports has become less and less.”
He spoke of de-dollarisation and a strong rouble driven by high exports and limited imports. “We understand why the rouble is so strong now. We have a lot of exports and fewer imports, and now there’s no outflow of capital,” he said. “Our businesses now use more roubles, even for investment, for savings and in foreign trade.”
'Big jump in real income'
On living standards in Russia, the minister pushed back against claims that making ends meet had become a major problem for ordinary people. Data from Russia's Federal Service for State Statistics, also known as Rosstat, showed real disposable incomes rose by 7.3 per cent in 2024 and by 4.1 per cent in the first quarter of this year, while inflation peaked near 9 per cent in late 2024, before easing.
“Last year, there was a very big jump in people’s income, in real income. Inflation was lower than the growth in nominal income, so in real terms there was genuine economic growth and real income growth in Russia over the last three or four years, maybe the best figures ever,” he said, referring to the targeted support of low-income families through special payments funded by oil and resource revenue.
Mr Reshetnikov also played down the Strait of Hormuz crisis, describing it as “temporary”. “We don’t regard these higher prices, and especially the situation in the Strait of Hormuz, as a key point of economic policy, because we see it as very temporary,” he added. “We couldn’t treat it as a solid base for the country’s future – it’s just a small period and we should use it to change.”
He outlined plans to increase productivity, including doubling the overtime limit to 240 hours a year from 120 hours, and expanding platform and remote work to ease labour constraints. “The labour market is now the biggest constraint on Russian growth,” he said. Asked whether globalisation is at an end, the minister said it will be fragmented but is not yet finished.
“It will be different," he added. "I don’t believe the world has stopped trading, that’s unimaginable. But it’ll be more complicated,” he said. “There will be several big markets and everyone should be included in the big markets. So, there’ll be fragmentation, of course. But I don’t believe world trade is finished.”
He noted the World Trade Organisation’s dispute settlement system remains blocked after the US halted appointments, but said Russia still applies WTO rules in its relations with China and key partners.
Western 'reconfiguration'
In the event of a potential peace deal with Ukraine, he said Russia would not simply “re-enter” western financial institutions. "It would be a reconfiguration," he explained. "It’s unlikely we’ll return to the institutions that abandoned us, that rejected us. So we’d have to re-establish a lot of rules and a lot of institutions."
The Kremlin has said any settlement must include security guarantees and recognition of new territorial realities, while Ukraine and its European allies are working on parallel proposals.
Mr Reshetnikov also said the Russian economy was adapting to a multipolar world. “Our growth is moderate now, but our development has become more sustainable and more balanced,” he said. “After the sanctions the West imposed, we’ve really changed the world. It seems the world is becoming genuinely more multipolar.”
