President Vladimir Putin noted Russia's positive economic outlook, pointing to successes in controlling inflation and reducing dependence on energy exports.
His optimistic report at the St. Petersburg International Economic Forum was in sharp contrast to the pessimistic forecasts of some ministers, who at the same conference announced a possible recession in the country.
Economy Minister Maxim Reshetnikov noted that Russia “is on the brink of recession.”
President Putin mentioned warnings of a recession, but stressed that “this is unacceptable.”
He added that the manufacturing industry is showing stable growth, which helps reduce dependence on oil and gas exports.
“The perception of the Russian economy as a raw materials economy and dependent on hydrocarbon exports is clearly outdated,” Putin noted, adding that in the first four months of 2025, the economy grew by 1.5%, and inflation fell from double digits to 9.6%.
Putin has used the annual forum to showcase Russia's economic might and attract foreign investment, but Western leaders have been shying away since the invasion of Ukraine in 2022, leaving the opportunity to businessmen from Asia, Africa and Latin America.
The economy, hit by a series of Western sanctions, has so far exceeded expectations.
High military spending contributed to economic growth and kept unemployment low despite rising inflation.
Generous recruitment bonuses and compensation for the families of those killed in Ukraine have also boosted incomes in poor regions. But in the long term, inflation and a shortage 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.
Putin said that the development of the military industry contributed to the emergence of new technologies that became available to the civilian sector.
He promised to continue modernizing the army 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
