Russian President Vladimir Putin will host his 5th wartime economic conference in St. Petersburg on June 3-6. The main topic of the talks is to be the search for a new development strategy, but officials and entrepreneurs are struggling with growing pessimism.
Read also: Lviv kicked the Polish company out of the construction site. Control Process wins in the courts, but loses on the ground
The Russian economy, based on the export of raw materials and estimated at $3 trillion, has slowed down dramatically. While in 2024 GDP growth was still 4.9%, last year it dropped to only about 1%. What's worse, in the first quarter of 2026, the economy contracted by 0.2%.
Business is speaking clearly on the war in Ukraine
During the forum in St. Petersburg, delegates will discuss, among others: about shifting labor to faster-growing sectors or implementing digital platforms based on artificial intelligence in banking and e-commerce. Officials also count on an increase in consumer demand. However, independent experts approach these plans with great skepticism.
“The government has essentially nothing to offer to revive growth“Oleg Vjugin, former vice-president of the central bank, said bluntly, quoted by Reuters. He pointed to double-digit interest rates, tax increases to finance the war and falling investments.
In turn, Anton Tabach, chief economist of the Expert RA rating agency, asks rhetorically: — The question is, what will drive growth when consumers are unlikely to increase their spending, investment has been declining for two years, and fiscal policy has been unstimulating at best?
Read also: Poland impresses Europe with low unemployment. The Czech Republic and Germany are left behind
As indicated by entrepreneurs who talked to Reuters, the best way to achieve this goal would be to end the war in Ukraine. “The bullishness and enthusiasm in the Russian stock market after each positive news from the US-brokered peace talks on Ukraine indicates what their real response should be,” said one corporate executive who asked not to be named.
“Tanks have no consumer value”
A temporary jump in oil prices, caused by tension in the Middle East and the almost complete closure of the Strait of Hormuz, provided some relief for the budget, but economists expect this effect to be short-lived.
In a rare act of honesty, a State Duma deputy from the Communist Party, representing Siberia, stated that the country will not survive the long-term continuation of the “special military operation”.
— What development, investments and capital expenditures can we talk about? Neither tanks nor missiles have consumption value: the economy produces them, but the population cannot consume them – said Renat Sulejmanov.
