Russian President Vladimir Putin delivered a keynote speech at the plenary session of the 28th Saint Petersburg International Economic Forum (SPIEF) 2025, where he underscored the complexities facing the nation’s economy. Despite his attempts to project optimism about Russia’s economic adaptability, he admitted that long-term international sanctions and sustained geopolitical stresses would deliver a heavy blow.
Speaking at his federal assembly address, Putin drove this point home, stating, “We have a very old rule. He talked about the historical precedents that have created our country’s economic landscape. While recognizing these challenges, he stopped short of signaling any alarm about the near-term health of the economy. His comments come as Russia grapples with high inflation, elevated interest rates, and stagnation, as noted by Elvira Nabiullina, the Governor of the Russian Central Bank.
Nabiullina said Russia had seen growth for two years in a row, mainly from unleashing dormant potential. She warned, much of these resources have already been used up. We’ve expanded for two years now at a pretty rapid clip because we tapped into some dormant resources,” she pointed out. The point we should take away is that a lot of those resources, we must acknowledge, have already been spent.
Kirill Dmitriev, Putin’s envoy on foreign investment, conveyed optimism at the prospects for American business to re-engage with Russia. To that end, he said, “Today, we had breakfast with the American Chamber of Commerce. A lot of investors flew in from the US. We are given the impression that many, many American companies would like to return.” Dmitriev emphasized the importance of dialogue over sanctions, stating, “I think the American administration understands that dialogue and joint cooperation is better than sanctions that do not work and hurt your businesses.”
Not all observers share this optimism. Emphasizing lingering worries that continue to plague Western businesses, Robert Agee, president of the American Chamber of Commerce in Russia, noted that “I think it’s clear you have to have some sort of an end to the conflict before American companies are going to seriously consider going back,” he asserted. Agee mentioned that “Western businesses have made decisions based on what happened three or four years ago,” indicating a long-lasting impact from previous geopolitical events.
In a recent report, Maxim Reshetnikov, Russia’s Minister for Economic Development, stated that the country is on the edge of “economic collapse.” All of this has the Russian government extremely worried about its fiscal future. These fears arise, in part, from global sanctions connected to its unilateral military operations in Ukraine. Ever since the full-scale invasion started in February 2022, governments have put military goals first and foremost. This short-term focus has been at the expense of our economic stability.
The Kremlin is clearly under pressure as it deals with major economic woes. These challenges have compounded by the thousands of international sanctions placed since the start of the war in Ukraine. Following the February 2022 invasion, many Western companies exited the Russian market. As long as wars go on, their return is not guaranteed.