High interest rates affecting Russian economy's growth potential, monetary easing path poses main risk to macroeconomic forecast - Reshetnikov

MOSCOW. Oct 6 (Interfax) - High interest rates in the Russian economy have eaten into profit margins at enterprises and future investment, impacting growth potential, while the monetary easing path is the main risk to the macroeconomic forecast, Russian Economic Development Minister Maxim Reshetnikov said at a meeting of the State Duma's Economic Policy Committee.

"As a result of joint efforts by the government and Central Bank we are seeing a gradual slowdown in inflation, which has now fallen to 8% [in annual terms as of September 29]. The downside of this process is living in a high-interest-rate environment. This has already impacted the result of companies, reducing profits and profit margins and, consequently, future investment. This is now directly affecting economic growth potential," Reshetnikov said.

"Risks to achieving the forecast persist. External risks include a potential decline in prices and demand for Russian exports due to both a slowing global economy and new sanctions, including secondary ones. The key internal risk remains the trajectory of monetary easing and its impact on investment and consumer activity. All of this is reflected in the conservative forecast," he said, commenting on risks to the macroeconomic forecast.

Reshetnikov said the Economic Development Ministry was expecting GDP growth of 1% and 1.3% in 2025-2026, respectively, with a gradual acceleration in 2027 and 2028 to 2.8% and 2.5%.

"Domestic demand, primarily consumer demand, will remain the key driver, underpinned by n growth in real wages and incomes. In just three years, real wages will grow 10% and real incomes more than 9%," he said.

He also said investment was expected to fall slightly in 2026 [by 0.5%]. The ministry expects investment in Russia to grow 3.6% per year on average in 2027-2028.