Economists have warned for months of a slowdown in the Russian economy, with the country posting its slowest quarterly expansion in two years in the first quarter of 2025.

The Kremlin has said this is to be expected after two years of rapid expansion as it ramped up military expenditure to fund the Ukraine campaign, but officials including the country’s economy minister have warned of pain ahead.

“Some specialists and experts are pointing to the risks of stagnation and even a recession,” Putin told attendees in an address at Russia’s flagship economic forum in Saint Petersburg.

“This must not be allowed to happen under any circumstances.”

“We need to pursue a competent, well-thought-out budgetary, tax and monetary policy,” he added.

Moscow’s economy grew in 2023 and 2024, despite the West’s sweeping sanctions, with massive state spending on the military powering a robust expansion.

But economists have long warned that heavy public investment in the defence industry is no longer enough to keep Russia’s economy growing and does not reflect a real increase in productivity.