Vladimir Putin noted the beginning of a decline in the Russian economy: “It is not unexpected”

The dynamics of key macroeconomic indicators of the Russian economy turned negative at the beginning of 2026, President Vladimir Putin said on Monday at a meeting on economic issues, reports The Moscow Times.

“In January this year, Russia's Gross Domestic Product was 2.1 percent lower than a year ago. Industrial production fell by 0.8 percent,” Putin cited statistics published by Rosstat, the country's national statistics office. He made the comments during a meeting between the Presidential Administration and the government.

“Actually, there is nothing unexpected here for us,” the Kremlin leader continued, adding that the government led by Prime Minister Mikhail Mishustin must return the country “to a path of sustainable economic growth.” Putin stressed that the government must also take care that the adopted policies do not lead to a sharp increase in inflation or to the destabilization of the labor market, already badly affected by the war against Ukraine and the limitation of the flow of seasonal workers from the former Soviet states of Central Asia.

Regarding the federal budget, which suffered a deficit of 3.5 trillion rubles in January-February and a decrease in total revenues, “balanced decisions” must be made and “long-term sustainability” must be ensured, Putin stressed. He added that a sound budget is an “important condition” for economic growth.

Russia's economy had anemic growth last year

The drop in GDP, previously reported by Rosstat, was Russia's first since 2023. Last year, according to official statistics, the country's economic growth slowed to 1 percent, half of the government's initial forecast.

Of the 28 major industrial sectors, 21 ended the year in losses: mining fell 1.6%, metallurgy down 2.1%, and clothing and footwear factories down 3.5%. Food production fell for the first time in 15 years, by 0.5%.

For the current year, authorities initially projected growth of more than 2 percent, then lowered their forecast to 1.3 percent, but even that may prove too optimistic.

According to Bloomberg , Moscow's Ministry of Economic Development is considering lowering it to 0.7 percent and is also preparing a budget cut after commodity revenues fell by half at the start of the year.