President Vladimir Putin has strongly urged his administration to prevent a recession in Russia “under any circumstances,” amid growing concerns from within his government and the broader economic community about the country’s slowing growth.
Speaking on Friday at Russia’s premier economic gathering, the Saint Petersburg International Economic Forum, Putin acknowledged warnings from economists and experts who have highlighted the increasing risk of economic stagnation and potential recession. He emphasized that allowing such a downturn to occur is not an option.
“Some specialists and experts are pointing to the risks of stagnation and even a recession,” Putin stated. “This must not be allowed to happen under any circumstances.”
To mitigate these risks, he called for the implementation of a “competent, well-thought-out budgetary, tax, and monetary policy,” underscoring the importance of strategic governance to stabilize the economy.
The comments follow Russia’s weakest quarterly economic growth in two years, recorded in the first quarter of 2025. While the Kremlin has framed this as a natural correction after two years of rapid expansion—largely fueled by increased military spending linked to the ongoing conflict in Ukraine—senior officials, including Russia’s economy minister, have raised concerns about potential economic pain ahead.
Despite withstanding Western sanctions, Russia’s economy posted solid growth in 2023 and 2024. This expansion was primarily powered by significant state investment in the defense sector. However, economic analysts have consistently cautioned that such growth, driven by military and energy expenditures, lacks sustainability and fails to reflect real gains in productivity.
Addressing these criticisms, Putin maintained an optimistic tone and pushed back against the idea that Russia’s economic health relies solely on defense and energy. He noted contributions from other sectors, particularly finance and IT, in supporting the country’s growth.
“Yes, of course, the defense industry played its part in this regard,” Putin said, “but so did the financial and IT industries.”
Looking forward, Putin emphasized the importance of “balanced growth” and urged his government to monitor key indicators closely. “We must keep a close eye on all indicators of the health of our industries, companies, and even individual enterprises,” he said.
His remarks signal a growing awareness at the highest levels of government that Russia’s post-sanctions economic model may be nearing its limits, and that diversification and prudent economic management are now urgently needed.
