St. Petersburg: Russia's St. Petersburg International Economic Forum (SPIEF), often considered a counterpart to the World Economic Forum in Davos, focused this year on the pressing issues of high interest rates and the strength of the national currency. The 28th edition of the forum gathered senior officials and company representatives from 144 countries to deliberate on global and regional economic concerns.
According to Anadolu Agency, a significant number of 1,060 deals were signed during the event, amounting to an estimated value of around $80 billion. Bahrain was highlighted as the guest country, with notable attendees including Indonesian President Prabowo Subianto, South African Deputy President Paul Mashatile, Chinese Vice Premier Ding Xuexiang, and Bahraini National Security Adviser Prince Nasser bin Hamad Al Khalifa. Russian officials also observed an increase in the attendance of US representatives compared to previous years.
The forum featured contentious statements from top Russian economic officials. Economic Development Minister Maxim Reshetnikov cautioned that the Russian economy is 'on the verge of recession,' insisting on the importance of curbing inflation while avoiding policies that might excessively slow economic activity. Bank of Russia Governor Elvira Nabiullina noted that inflation was decreasing faster than anticipated, and the central bank plans to reduce interest rates.
Russian President Vladimir Putin stressed the importance of measures against price hikes to ensure a smooth transition from economic overheating to balanced growth, asserting that economic stagnation or recession in Russia must be avoided. The Russian economy is projected to grow by just 2.3% this year, a decline from 4.3% last year and below the government's 3% target.
Participants at the forum also discussed the strong performance of the Russian ruble against other currencies. Sberbank CEO German Gref expressed concerns over the current US dollar/Russian ruble exchange rate of 78-79, suggesting it should be at least 100. First Deputy Prime Minister Denis Manturov shared similar concerns, noting difficulties faced by Russian exporters due to the strong ruble. Andrey Gangan, director of the Bank of Russia's Monetary Policy Department, emphasized that the ruble reflects the economic state, highlighting the inflow of capital into ruble-denominated assets as high interest rates curb demand, including imports. The ruble has appreciated nearly 30% against the US dollar since the start of the year.
In his address, Putin remarked that countries attempting to impact the Russian economy through sanctions are inadvertently harming themselves. He warned that efforts to damage Russia, including through the shadow fleet, could ultimately influence global oil prices, affecting those countries. Special Envoy Kiril Dmitriev stated in an interview with Russian TASS agency that Europe has incurred losses exceeding 1 trillion euros ($1.1 trillion) from not accessing Russian gas.