Russian President Vladimir Putin on Friday strongly cautioned officials against allowing the country to fall into a recession, emphasising that this “must not be allowed to happen under any circumstances.”
His remarks came during Russia’s main economic forum in Saint Petersburg, even as some members of his government have signalled potential economic challenges ahead.
Economists have consistently warned of a slowdown in the Russian economy, which recorded its slowest quarterly growth in two years during the first quarter of 2025.
While the Kremlin attributes this to an expected levelling off after two years of rapid expansion driven by substantial military spending for the Ukraine campaign, officials, including the economy minister, anticipate difficulties.
Putin stressed the necessity of a “competent, well-thought-out budgetary, tax, and monetary policy” to avert stagnation.
Despite extensive Western sanctions, Russia’s economy experienced robust growth in 2023 and 2024, largely powered by massive state investment in its defence industry.
However, economists have long argued that this heavy public investment alone cannot sustain economic growth indefinitely and does not indicate a true increase in overall productivity.
