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President Vladimir Putin claimed on June 20 that Russia's economy is strong despite war and sanctions, brushing off mounting warnings from his own officials about stagnation and looming recession.
Speaking at the St. Petersburg International Economic Forum, Putin was asked about reports that the ongoing war in Ukraine was "killing" the Russian economy.
"Rumors of my death are greatly exaggerated," he replied, quoting American writer Mark Twain.
The president claimed that Russia has outpaced global economic growth over the past two years, allegedly expanding by over 4% annually.
"Our most important task is to ensure the economy's transition to a balanced growth trajectory," Putin said. "At the same time, some specialists and experts point to the risks of stagnation and even recession. This should not be allowed under any circumstances."
The statement came just a day after Central Bank Governor Elvira Nabiullina warned on that Russia's wartime economic momentum is fading fast. She said the economy is approaching the limits of its growth potential, adding that previously effective tools are now exhausted.
Economy Minister Maxim Reshetnikov echoed the concerns, telling a separate forum audience on June 19 that Russia is "on the verge of a transition to recession." He emphasized that recession is not inevitable and that "everything depends on our decisions."
Moscow has experienced rapid inflation and historically high interest rates amid its full-scale invasion of Ukraine. The central bank raised rates repeatedly to combat inflation, but on June 6, it made its first cut in nearly two years, from 21% to 20%.
Putin has criticized the central bank's tight monetary policy for choking off private investment, especially in non-defense sectors.
Despite Putin's optimistic rhetoric, analysts attribute Russia's economic slowdown to sustained international sanctions, falling oil prices, rising wartime spending, and supply disruptions.
Russia's ever-mounting losses on the battlefield which recently passed the 1 million mark are also likely contrbuting to the economic turmoil as the Kremlin is having to pay people to sign up to fight rather than introduce what would be a hugely unpopular mass mobilization.
According to an analysis by economist Janis Kluge, Russia's daily bill just for sign-up bonuses is $24 million.
The ballooning bills come at a time when Russia's economy is already under huge strain from Western sanctions and falling oil and gas revenues.
"The implications for Russia are grave," energy security analyst Wojciech Jakobik wrote in an op-ed for the Kyiv Independent this week.
Kateryna Hodunova
