Potanin sees scope for moderate growth as Russia seeks economic balance

Nornickel president Vladimir Potanin said Russia’s economy faces persistent pressure, including sanctions, but has grounds for moderate growth in 2027. In an October 10 interview with RBC TV, he credited government efforts to reduce spending while warning of an economic imbalance.

Potanin said restoring balance in time was crucial. He recalled Finance Minister Anton Siluanov describing expenditure reductions at a meeting of the Russian Union of Industrialists and Entrepreneurs, RSPP. Having seen the difficulty of cutting costs in private business, Potanin said the challenge was even greater for public finances.

The outlook remains subdued. RBC cited the Ministry of Economic Development’s forecast for GDP growth of 0.6% in 2026 and a 5.4% decline in fixed investment. Investment activity is projected to rise by only 0.2% in 2027. These are forecasts rather than completed annual results.

The ministry put annual inflation at 7.17% as of October 5. The Bank of Russia has paused its rate-cutting cycle, keeping the key rate at 14%, a level confirmed in its September decision. RSPP head and business ombudsman Alexander Shokhin has argued that a rate below 10% is needed for investment activity to resume.

Federal spending could reach 20.9% of GDP in 2026, according to the budget materials cited by RBC. That compares with just under 20% in 2024–2025 and less than 19% in 2019–2021. The report linked the earlier fiscal stimulus to the central bank’s need to restrain inflation.

The government plans to reduce spending to 19.6% of GDP in 2027 while allowing a small nominal increase from the 2026 estimate. Proposed expenditure optimisation totals 1.9 trillion roubles.

The Ministry of Finance also aims to raise an additional 1.5 trillion roubles in 2027 through legislative initiatives. They include applying the progressive personal income tax scale consistently to passive income, a windfall tax on mining and metals businesses, further excise increases and other measures. Potanin’s expectation of moderate growth is his assessment of the conditions being created, rather than a guarantee of recovery.