MOSCOW, July 20. /TASS/. The Russian economy is experiencing an "investment pause" rather than a systemic crisis, and retains the foundation for a recovery with full-year GDP growth projected to reach up to 0.7%, Vladimir Yeremkin, a senior researcher at the Structural Research Laboratory of the Presidential Academy's Institute of Applied Economic Research (IAER), told TASS.

"We are currently in a phase of an investment pause and fading consumer momentum, which is far from a systemic crisis. The economy is paying the price for cooling down after overheating, but the base for recovery remains intact. Meanwhile, second-quarter GDP is likely to show a slight plus, and full-year economic growth could reach up to 0.7%, barring any major risks," Yeremkin said.

His comments follow a report titled "Study 2. Inflation and Anti-Inflation Policy" published on Monday by Dmitry Belousov, head of analysis and forecasting of macroeconomic processes at the Center for Macroeconomic Analysis and Short-Term Forecasting. Belousov argued that the Russian economy is facing a near-stagflationary situation.

According to Belousov, excessively tight monetary policy has triggered a decline in investment, dragging down overall economic momentum. As a result, the Russian economy contracted in the first quarter of this year amid stubborn inflation, and it remains uncertain whether it can break out of this cycle in the second quarter.

Yeremkin countered that while Belousov’s report is robust, it remains highly controversial and relies on overly alarmist terminology, such as "near-stagflation."

"This is somewhat of an exaggeration. Although individual sectors show mixed dynamics, the economy on average continues to expand, and the pace of inflation acceleration has not yet triggered major alarms at the Central Bank. Therefore, it is more accurate to speak of a significant growth slowdown amid persistent price pressures," Yremkin concluded.

At the same time, the expert noted that high interest rates have nearly halved inflation from its peak, paving the way for a monetary easing cycle. Furthermore, the key rate has already been cut by a third to date, and current price volatility is more likely driven by a supply shock in the fuel market than by Central Bank policy errors, he continued.

"Inflation today is uneven across various goods and services. There is a group of goods and services experiencing sustained non-monetary price growth, such as regulated tariffs, fuel, and certain food items, while many other items show more restrained dynamics. The risks of persistent high inflation in the second half of the year remain significant, but much will depend on the Central Bank's policy and the successful management of emerging supply shocks," the expert concluded.

The Economic Development Ministry told TASS that it carefully reviews expert assessments as part of an ongoing professional discussion.

"We continue to closely monitor the situation, and all incoming data is taken into account when formulating macroeconomic policy," the ministry stated.