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Russia’s trade with the US and European Union has fallen sharply due to sanctions imposed over its ongoing war in Ukraine
Published : 24 Apr 2025, 11:38 PM
Russian President Vladimir Putin urged his economic officials on Thursday to take advantage of opportunities arising in the global economy from market turbulence and intensifying trade wars.
Russia, whose trade with the United States and European Union has fallen sharply due to sanctions imposed over its ongoing war in Ukraine, has not suffered from the US tariffs on many countries announced by US President Donald Trump.
Russia's economy has performed better than it expected during the three years of conflict despite sanctions, but the country is now bracing for a protracted period of lower oil prices - its main export - and declining budget revenues.
Speaking to officials, Putin said: "The global economic situation is becoming more complicated as commodities and financial markets experience significant fluctuations due to intensified global competition."
"It is necessary not only to monitor these factors and predict their changes but also to use the emerging opportunities to develop domestic production, trade relations and exports to strengthen the national economy as a whole," Putin added.
The comments were Putin's first on the global economic situation since the US tariffs were announced. Putin, who has engaged in diplomacy with the US to seek peace in Ukraine, has praised Trump and his policies on many occasions.
Putin's meeting with officials took place one day before the central bank's board meets to decide on its benchmark interest rate, which is currently at 21 percent - its highest level since the early years of Putin's rule.
Both the central bank and the Finance Ministry, whose heads attended the meeting with Putin, warned about the consequences of global turbulence on the Russian economy.
Finance Minister Anton Siluanov said on Apr 23 that Russia needs to boost its fiscal reserves to ensure at least a three-year coverage of budget spending if oil prices remain low for an extended period.
Putin acknowledged that budget spending had surged by 25 percent in the first quarter but said it was done intentionally to ensure that all recipients of budget funds received their money on time.
Russia has cut its forecast for 2025-2027 oil and gas export revenues, a key source of funding for the state budget, due to weaker oil prices, expecting proceeds to fall by 15 percent this year, according to an economy ministry document seen by Reuters.
The country's economic growth is set to slow to at least 2.5 percent this year from 4.3 percent in 2024, in what Putin described as a "soft landing," saying it was part of the plan to fight inflation, which is still running above 10 percenr.
The Russian central bank warned this month that oil prices could be lower than forecast for several years due to reduced global demand. The previous board meeting took place on Mar 21, before the US tariffs were imposed.
