In contrast, business sentiment strongly indicates that the economy is “on the brink of a recession.”
Putin highlighted statistics showing a gross domestic product growth of 1.5 percent in the first four months of the year. Analysts, however, attribute this solely to increasing output from the defense sector to support the war in Ukraine. Civilian sectors have significantly slowed down as the government ended various subsidy programs over the past year, particularly for residential mortgages.
The government faces pressure as global crude oil prices, key to a third of its revenue, have dropped to their lowest in over three years due to Saudi Arabia and its Gulf allies competing for global market share against higher-cost producers like the U.S.
Putin’s public statements often aim to resolve disputes among the different agencies, businesses, and groups seeking influence in the Kremlin. Recently, tensions have heightened between big business and the central bank, which raised interest rates to over 20 percent to control inflation driven by excessive government spending.
Putin, who has consistently supported the central bank, described its policy as “responsible.” However, he cautioned that reducing nearly 10 percent inflation was “far from the whole picture.”
“Our most important task this year is to transition the economy to balanced growth,” he expressed. “That means moderate inflation, low employment, and continued positive economic dynamics. It’s important to focus on all indicators of how our [various] sectors and companies are performing.”
Putin did not hint at any impending compromise with the West over Ukraine’s situation at the conference.
“I’ve often said that Russians and Ukraine are the same people,” he said during a panel discussion. “In that sense, all of Ukraine is ours.”
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