Overview

• Maxim Reshetnikov said on June 19 at the St. Petersburg International Economic Forum that current business indicators point to Russia being on the verge of recession.
• Annual inflation remains near 10%, a level that prompted the Russian Central Bank on June 6 to cut its key interest rate from 21% to 20%.
• A severe labor shortage driven by military mobilization and professional emigration left Russia with an estimated shortfall of 2.6 million workers by the end of 2024.
• Defense spending rose to about $130 billion in 2025, accounting for nearly a third of the federal budget and helping to sustain growth and low unemployment.
• Economists caution that growth fueled by military outlays lacks real productivity gains and risks locking Russia into prolonged economic stagnation.