At the St. Petersburg International Economic Forum, President Vladimir Putin acknowledged that Russia's economic momentum is slowing but said he expects a near-term recovery. Officials confirmed growth slowed sharply in 2025 and GDP contracted in Q1 2026. Putin noted a 2.6% budget deficit but did not address higher debt-servicing costs from elevated interest rates. The forum’s opening was disrupted by a Ukrainian drone attack, and Deputy PM Alexander Novak said oil output is below plan due to unscheduled repairs.
Putin Acknowledges Slowing Russian Economy at St. Petersburg Forum, Predicts Recovery
FILE PHOTO - Russian President Vladimir Putin delivers a speech at the St. Petersburg International Economic Forum in St. Petersburg. (is associated with: «Russia's economic growth has slowed, Putin says at St Petersburg forum») -/Kremlin/dpa
Russian President Vladimir Putin acknowledged that economic momentum in Russia is weakening during the plenary session of the St. Petersburg International Economic Forum (SPIEF) on Friday, while expressing confidence that the economy will recover in the near term.
"Yes, economic momentum is currently slowing," Putin said, adding a jab at the European Union by noting that Russia has now reached a level where Europe has been for years.
Economic Context
Russia has been at war with Ukraine for more than four years. In the early phase of the conflict, Moscow managed to sustain growth despite Western sanctions by redirecting parts of the economy toward defence production. Growth slowed sharply in 2025, and the government acknowledged a contraction in gross domestic product (GDP) in the first quarter of 2026.
FILE PHOTO - Russia's President Vladimir Putin speaks during the meeting of the Supreme Eurasian Economic Council (SEEC) at the Palace of Independence in Astana. (is associated with: «Russia's economic growth has slowed, Putin says at St Petersburg forum») -/Kremlin/dpa
Budget And Debt
Putin said the budget deficit currently stands at about 2.6% and cautioned it could widen further this year. He contrasted that figure with higher deficit levels in many European countries, but did not highlight that high interest rates driven by inflation mean Russia is spending comparatively more on servicing its national debt than many EU states.
Forum Disruption And Security
The annual SPIEF, used by Moscow to showcase its economic and geopolitical ambitions, was disrupted on Wednesday after a Ukrainian drone attack on St. Petersburg triggered alerts that lasted several hours. Delegates arriving at the venue reported seeing black smoke rising over parts of the city.
Energy Sector Pressure
Against a backdrop of increased drone strikes on refineries in recent months, Deputy Prime Minister Alexander Novak admitted at the forum that oil production is below original plans. He attributed the shortfall to unscheduled repairs but did not provide further detail about their cause.
The forum runs until Saturday. According to the Kremlin, roughly 20,000 participants from more than 100 countries have registered to attend.
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