Russian President Vladimir Putin acknowledged that high inflation is the cost Russia is paying for its rapid economic growth. Speaking at the St. Petersburg Economic Forum on June 20, Putin stated that the Central Bank and the government are taking necessary measures, including adjusting the key rate, to address the issue. He projected that the inflation rate would be at 7% in 2025.

Putin highlighted the structural changes occurring within the Russian economy, noting that over 43% of GDP growth is now independent of the oil and gas sectors and the defense industry. He emphasized that a substantial portion of the growth is concentrated in the industrial sector, specifically industries not directly linked to defense.

Addressing concerns about the state of the Russian economy, Putin quoted Mark Twain, saying, “The rumors of my death have been greatly exaggerated,” to dismiss claims of its demise. He pointed out that Russia’s GDP growth surpassed the global average, reaching 4.1% in 2023 and 4.3% in 2024, while global growth stood at 3.3%.