At the St. Petersburg International Economic Forum, Russian Economy Minister Maxim Reshetnikov stated that Russia is nearing a recession. High borrowing costs and reduced foreign investment are contributing to the economic downturn.
Despite the Central Bank's interest rate cut, businesses face challenges. High defense spending, while supporting growth, has fueled inflation and strained the economy.
Military expenditure has significantly increased, reaching an estimated $149 billion in 2024. This represents a substantial portion of Russia's GDP and government spending. The forum, once a platform for Western business, now sees limited foreign investment.