Russia slams state of German economy while facing problems at home

The Kremlin believes the German economy, reeling from two consecutive years of recession, is struggling because Berlin has turned away from Russia, foreign affairs spokeswoman Maria Zakharova said on Saturday.

Germany is on the brink of another recession because Berlin has failed to assert its sovereignty, Zakharova said at the St Petersburg International Economic Forum – an annual business event for the economic sector.

It comes after government officials said at the conference that Russia – whose economy has been hit hard by Western sanctions imposed over the war in Ukraine – was facing the threat of a possible recession.

Zakharova said German companies had left the Russian market “with tears in their eyes” because they had been forced to do so by Western sanctions.

Now they are leaving their domestic market because “Germany no longer has the resources it needs to maintain its economic, industrial and scientific development,” the spokeswoman claimed.

Russia was indeed a lucrative market for German businesses, but many firms opted to leave or reduce operations after Western countries began imposing economic sanctions over the war in Ukraine launched more than three years ago.

While initially the Russian economy fared surprisingly well under the sanctions – particularly due to the switch to arms production – signs have been growing that a crisis is brewing.

Russian central bank chief Elvira Nabiullina has called for a new growth model for the economy, while Economy Minister Maxim Reshetnikov has warned of a recession.

Russian President Vladimir Putin has tried to paint a more optimistic picture, calling for stagnation or even recession to be avoided.