MOSCOW: The Kremlin on Wednesday pushed back at U.S. President Donald Trump’s warning that the Russian economy was going to collapse, saying that Russia had considerable reserves and was strong enough to allow President Vladimir Putin to achieve his goals.
Trump on Tuesday said that Putin should settle the war in Ukraine which was making Russia look bad. He also mentioned “long lines waiting for gasoline” and said the Russian “economy is going to collapse”.
Kremlin spokesman Dmitry Peskov said he did not want to comment on Trump’s remarks about Russia but that Putin was open to searching for a way to end the war and that Moscow was grateful to Trump for his efforts.
“As for the Russian economy, it has a sufficient and considerable margin of safety to allow the country’s leadership and all of us to implement the plans that we set for ourselves,” Peskov told reporters.
After Trump cast the BRICS grouping as “an attack on the dollar,” Peskov said that the group of Brazil, Russia, India, China and South Africa and others was never aimed at other countries or their currencies.
IMF PREDICTS ONLY FAINT GROWTH
Russia’s economy is slowing sharply this year and the government forecasts gross domestic product (GDP) growth of 1.0% after 4.3% growth in 2024 and 4.1% growth in 2023, though the International Monetary Fund has downgraded its 2025 forecast to 0.6% from 0.9%.
During Putin’s first two terms as president from 2000 to 2008, Russia’s economy soared to $1.7 trillion from less than $200 billion in 1999. But Russia’s nominal GDP is now $2.2 trillion, about the same level it was in 2013, the year before Russia annexed Crimea.
With Russia and Ukraine locked into a draining drone and artillery war of attrition for a fourth year, the economy is becoming a major area of competition between the West and Russia.
ECONOMIC WAR
Ukraine’s Western supporters say that Russia’s economy is weaker than it looks and if pressure is increased then the pain of ordinary Russians will force Putin to change course.
The Kremlin says that the economy is being slowed on purpose to stop overheating and far outperformed the G7 average over 2023 and 2024 despite the most onerous sanctions ever imposed on a major economy.
Asked about Trump’s remarks at an energy conference in Moscow, Deputy Prime Minister Alexander Novak, who oversees energy and the economy for the government, said that Russia had a stable supply of gasoline.
“We have a stable domestic market supply, we see no problems in this regard,” Novak said.
“The balance is maintained between production and consumption, and we, on the part of the government and the relevant ministries, are doing everything to ensure that this remains the case.”
Double-digit interest rates deterred the biggest Russian retailers from buying up gasoline in the winter months when there was a surplus and then a series of Ukrainian drone attacks knocked out a chunk of Russian refinery capacity.
That led to some gasoline shortages in regions in the periphery of Russia, the world’s second largest oil exporter, though the government has moved swiftly to prioritise supplies to regions with shortages.
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