“Wars, sanctions ..., but the economy is developing,” independent Russian outlet IS quoted Putin.
“Everything is stable. Even the domestic market is growing. Living standards are rising.”
He added that Western sanctions “hurt those who impose them more,” and said attacks by Ukrainian forces that cause some damage to Russian infrastructure only “mean the need to strengthen air defense systems.”
In March, Russia’s Finance Ministry acknowledged that the budget shortfall was widening at record rates. A collapse in commodity rents and a slowing economy have continued to erode budget revenues.
On June 1, Reuters reported that the Russian economy
had sharply slowed amid Ukrainian drone strikes and the protracted war. Reuters
said Russia’s commodity-based economy, valued at roughly $3 trillion, slowed to
about 1 percent growth in 2025 from 4.9 percent in 2024 and contracted 0.2
percent in the first quarter of 2026. The news agency reported that Ukrainian
drone attacks on refineries, fertilizer plants, and ports put a significant
portion of the economy out of service and affected about a quarter of Russia’s
refining capacity.