Putin Presses for Growth as Russia’s Wartime Economy Slows

Russian President Vladimir Putin will host the St Petersburg International Economic Forum this week as he urges officials to find ways to restore economic growth.

Russia’s economy grew by 4.9% in 2024 but slowed to about 1% last year and contracted by 0.2% in the first quarter of 2026. Authorities blame high interest rates, Western sanctions and a strong ruble. They now expect growth of just 0.4% this year.

The pressure has been compounded by Ukrainian drone attacks on refineries, ports and other infrastructure. Analysts say the strikes have affected a significant part of the Russian economy, including about a quarter of its refining capacity.

According to Reuters, Russian business leaders see an end to the war in Ukraine as the best way to restore growth. Peace talks brokered by the United States are currently on hold, however, leaving possible US investment and sanctions relief stalled as well.

The forum will focus on economic growth, shifting labor into more promising sectors and the development of artificial intelligence. Several economists warn, however, that high interest rates, rising taxes and falling investment will make it very difficult to return to stronger growth.

Without foreign investment and a major easing of sanctions, experts say Russia risks slipping into long-term stagnation.

(reuters, bak)