(Reuters) – Russia’s economy is showing the first signs of cooling, with sales and orders falling in various sectors due to high interest rates and inflation, Economy Minister Maxim Reshetnikov was cited as saying on Monday by the Interfax news agency.
The comments came after documents prepared for an internal government discussion this month showed lower oil prices, budget constraints and a rise in bad corporate debt to be among the top economic risks facing Russia, with a possible jump in U.S. and OPEC oil output of notable concern.
“We are now seeing the first signs of cooling in the economy,” Reshetnikov was quoted by Interfax as saying. “Already based on the results of November and especially December, we see that growth has stopped being frontal.
“The pace has slowed in a number of industries: the food industry, the chemical industry, wood production, and certain sectors of machine building,” he said. “The volume of orders from businesses is decreasing.
“A vivid example here is the automotive market, where sales of passenger vehicles and, in particular, specialised machinery and agricultural equipment, are falling due to high interest rates on loans.”
Reshetnikov said his ministry was working with the central bank and finance ministry to link monetary and fiscal policy.
“We are looking for a balance between curbing inflation and economic growth,” Reshetnikov was cited as saying.
(Reporting by Darya Korsunskaya; Writing by Alexander Marrow; Editing by Andrew Osborn)
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