Russian economy ‘won’t be as it was’, says central banker

The head of the Russian Central Bank warned yesterday that the country's economy faces pressure from abroad that could persist indefinitely, dampening hopes that conditions could return to what they were before Russia sent troops into Ukraine.

"It seems to me that it's obvious to everyone that it won't be as it was before,'' Elvira Nabiullina said at a session of the St. Petersburg International Economic Forum, an annual showpiece gathering aimed at investors.

"External conditions have changed for a long time indeed, if not forever," she said.

Russia was hit by a wide array of sanctions after the start of the Ukraine military operation, including major banks being cut off from the SWIFT international payment system and Western bans on flights. Hundreds of foreign companies have suspended operations in Russia or pulled out entirely.

The consequences of those actions have yet to be fully assessed.

Minister of Economic Development Maxim Reshetnikov told the same session that the prognosis is for Russia's gross domestic product to fall by 7.8 percent this year, but "in the last month, there's been a wave of improving assessments and prognoses.''

Many Russian officials have tried to brush off sanctions by contending that Russian enterprises can step in to take over.

Government funding could help those efforts, but Finance Minister Anton Siluanov warned that such measures could be overdone.

"Now we hear, `Let's get more funding, let's invest more there' ... such budget medicine should not turn into a narcotic" he said.