Putin Warns Against Recession Risks Amid Inflation, Defense Spending

President Vladimir Putin has issued a strong directive to Russia's economic leaders to prevent the country from sliding into a recession, emphasizing the need for balanced growth characterized by moderate inflation, low unemployment, and positive economic dynamics. Despite some optimistic remarks from Putin about curbing inflation and reducing reliance on energy exports, key government figures, including Economy Minister Maxim Reshetnikov, have warned that Russia's economy is on the brink of recession, with issues such as high interest rates, investment slowdowns, and rising bankruptcies contributing to economic cooling. The Bank of Russia has recently lowered interest rates slightly but faces criticism for not cutting them enough to stimulate growth amid heavy defense spending tied to the Ukraine conflict. Manufacturing and business leaders have expressed concerns over reduced steel consumption and the suffocating effect of high borrowing costs on investment, prompting calls for more decisive rate cuts. Inflation remains high, driven by food price increases and labor shortages, while the economy's long-term outlook is challenged by a lack of foreign investment and the limits of military-related fiscal stimulus. Putin reiterated that recession or stagnation must be avoided at all costs, underscoring the critical importance of transitioning the economy toward sustainable and balanced growth.