President Vladimir Putin expressed confidence in Russia's economic prospects, saying the country had managed to control inflation and reduce its dependence on energy exports.
His upbeat speech at the St Petersburg International Economic Forum stood in stark contrast to the pessimistic forecasts of some members of his cabinet, who warned at the same conference of a possible recession in the country.
Economy Minister Maxim Reshetnikov noted that Russia “is on the brink of recession.”
Mr Putin mentioned warnings of a recession but stressed that “this is unacceptable”.
He also noted that the manufacturing industry is showing stable growth, which allows the country to reduce its dependence on oil and gas exports.
“The idea of the Russian economy as a raw materials economy and dependent on hydrocarbon exports is clearly outdated,” Mr Putin said, adding that in the first four months of 2025 the economy grew by 1.5% and inflation fell from double digits to 9.6%.
Mr Putin has used the annual forum to showcase Russia's economic might and attract foreign investment, but Western leaders have shunned him since Moscow sent troops into Ukraine in 2022, leaving him with businessmen from Asia, Africa and Latin America.
The economy, hit by a series of Western sanctions, has now outperformed forecasts.
High defense spending has fueled growth and kept unemployment low despite rising inflation.
Large bonuses for recruiting troops and payments to families of those killed in Ukraine have also boosted incomes in the country's poorer regions. However, in the long term, inflation and a lack of foreign investment pose a threat to the economy.
Economists warn of mounting pressure on the economy and the possibility of stagnation due to a lack of investment in non-military sectors.
Mr Putin said the growth of the military industry had helped develop new technologies that were becoming available to the civilian sector.
He promised to continue military modernization based on lessons learned from the fighting in Ukraine.
“We will increase the combat capability of the Russian Armed Forces, modernize the military infrastructure and equip the troops with the most modern equipment,” Putin said.
Sourse: breakingnews.ie
