Putin Faces Weak Economy, Drone Threats at 'Russian Davos'

Russian President Vladimir Putin is set to address the St. Petersburg International Economic Forum, often called "Russia's Davos," amidst a challenging economic landscape. The war in Ukraine has plunged the Russian economy into stagnation, characterized by rising prices, tax hikes, high borrowing costs, business closures, and labor shortages. This marks a significant shift from the forum's earlier days when it attracted Western investors eager to strike deals in Russia's burgeoning economy.

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The Russian economy is entering a stagnation, with high interest rates and high inflationary pressure.

Adding to the economic pressure, Ukraine has intensified its attacks on Russia's critical energy infrastructure, targeting oil depots, refineries, and export hubs. These strikes aim to disrupt Moscow's most crucial revenue stream. In a move with symbolic weight, one such attack occurred in Saint Petersburg as the forum commenced, with smoke visible in the background as dignitaries arrived.

Experts note the Russian economy is experiencing stagnation with high interest rates and inflationary pressures. While not mirroring the crises of the 1990s, the situation reflects a "slow degradation of everything." Official statistics reveal a 0.2 percent contraction in GDP in the first quarter, the first quarterly slump in three years. Furthermore, the government reported an $80 billion budget deficit in the first four months of 2026, exceeding the annual target.

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I don't see the Russian economy entering the 1990s or something similar, it's just a slow degradation of everything.

The forum itself has transformed from a Western-centric business event to a platform showcasing Russia's altered global standing. Drones and military hardware are now on display, and attendees are primarily from China, with a notable absence of Americans and Europeans. The slimmed-down Western contingent includes figures like former actor Steven Seagal and American conspiracy theorist Candace Owens. Putin has historically used the event to project confidence in the state's ability to manage war spending and dismiss Western sanctions. However, many Russians report a rising cost of living, indicating the war's economic impact is increasingly felt at home.

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Rumors of my death have been greatly exaggerated.