Russia must not let economy slip into recession, says Putin

Russia's economy must under no circumstances slide into recession, President Vladimir Putin told an economic forum, in a clear instruction to assembled government ministers and central bankers.

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The Bank of Russia hiked its key interest rate to the highest level since the early 2000s in October, seeking to curb stubbornly high inflation, before cutting it by one percentage point to 20% earlier this month.

The Kremlin has said this easing did not go far enough, as the economy threatens to cool too quickly after running hot for two years thanks largely to huge increases in defence spending on the war in Ukraine.

"Our most important task is to ensure the economy's transition to a balanced growth trajectory," Putin said in a keynote speech at the St Petersburg International Economic Forum.

Consumer inflation is running at 9.598 on an annual basis, according to the economy ministry, well above the central bank's 48 target, but has been gradually easing since late April.

"Balanced growth is moderate inflation, low unemployment, and continued positive economic dynamics... At the same time, some specialists and experts point to the risks of stagnation and even recession. This should not be allowed under any circumstances," Putin said.

Economy Minister Maxim Reshetnikov, in a downbeat message to Russia's showcase economic event, said on Thursday that the economy was on the verge of sliding into recession and monetary policy decisions would determine whether it falls into one or not.