Key facts
- Sanctioned Russian businessmen criticize the country's tight monetary policy.
- They claim the policy has created an economic 'trap' leading to stagnation.
- Roman Trotsenko compared the central bank's policy to a 'Volcker shock'.
- Alexei Mordashov reported a 30% decrease in domestic steel demand.
- Russia's key interest rate is currently 14.5%.
Several sanctioned Russian billionaires have publicly criticized the country's economic policies, particularly the tight monetary policy implemented by financial authorities, which they claim is creating an economic 'trap' and leading to stagnation. Roman Trotsenko, a billionaire involved in transport, fertilizer, and real estate, likened the central bank's approach to a 'Volcker shock,' referencing the aggressive rate hikes by the U.S. Federal Reserve in the early 1980s. He attributed the current wartime rate policy to Alexei Zabotkin, the central bank's First Deputy Chairman. Dmitry Mazepin, owner of fertilizer producer Uralchem, suggested the central bank's efforts to cool the economy were akin to actions by hostile Western powers. Alexei Mordashov, Russia's richest man and owner of steelmaker Severstal, reported a 30% decrease in domestic steel demand over the last three years, leading his company to cut its investment portfolio by 24% and experience negative cash flow. He expressed certainty that this instability would result in further declines in investments and GDP. German Gref, CEO of Sberbank, commented that Russia's meager growth rate under current conditions was 'already a miracle.' President Putin acknowledged the businessmen's concerns about high borrowing costs but stated Russia's economic foundations were sound. The criticisms come amid expectations that Russia's economic growth will slow significantly this year due to high interest rates, an overvalued rouble, and Western sanctions.