“The perception of Russian economy as based on raw materials and dependent on hydrocarbons exports have clearly become outdated,” Putin said, adding that the economy grew by 1.5 per cent in the first four months of 2025 and inflation has dropped from double digits to 9.6 per cent.
Putin has used the annual forum to highlight Russia’s economic prowess and encourage foreign investment, but Western executives have shunned it after Moscow sent troops into Ukraine in 2022, leaving it to business leaders from Asia, Africa and Latin America.
The economy, hit with a slew of Western sanctions, has so far outperformed predictions. High defence spending has propelled growth and kept unemployment low despite fuelling inflation.
Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine also have put more income into the country’s poorer regions. But over the long term, inflation and a lack of foreign investments pose threats to the economy.
Economists have warned of mounting pressure on the economy and the likelihood it would stagnate due to lack of investment in sectors other than the military. (AP) RD RD