Sharp decline in business climate raises fears about the Russian economy
The Kremlin has affirmed that the stability of the Russian economy remains intact despite business confidence reaching its lowest levels since mid-2022 and a rise in price expectations, viewing the current challenges as not being decisive. It explained that the government and Vladimir Putin regularly monitor these challenges and are working to regulate and improve the situation, even though business sentiment has deteriorated, leading to a 4.5-point decline in the Business Climate Index to a negative 3.6—its lowest level since mid-2022. This decline coincides with rising inflation expectations due to increased fuel costs resulting from the escalation of Ukrainian attacks on Russian oil refineries, which threatens to push economic activity toward stagflation—a situation where tackling inflation becomes difficult amid weak economic growth.
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