BackECONOMY
Putin Seeks Corrective Steps As Russia's GDP Shrinks 1.8% Amid Ukraine War
President Putin expressed concern over Russia's economic slowdown, calling for corrective measures and detailed reports after GDP fell 1.8% in January–February. The briefing highlighted weak performance in key sectors and included references to policy moves and unemployment trends amid ongoing war-related pressures.
Why It Matters
The remarks signal a shift from prior framing of the slowdown as a controlled transition and could influence monetary and fiscal policy, with potential impacts on investment and public sentiment amid wartime constraints.
Timeline
13 Events
Putin demands detailed assessment of the economy
April 21, 2026
Putin stated that current macroeconomic indicators were below the forecasts of the government and the central bank, and he demanded a detailed assessment of the situation.
Senior officials attend the economic meeting
April 21, 2026
The Wednesday meeting was attended by Prime Minister Mikhail Mishustin, Kremlin Deputy Chief of Staff Maxim Oreshkin, First Deputy Prime Minister Denis Manturov, Deputy Prime Minister Alexander Novak, Central Bank Governor Elvira Nabiullina, and the CEO of PSB bank.
Putin calls for corrective steps during televised economic meeting
April 21, 2026
During a televised meeting on economic performance, Putin said he expected detailed reports on the current economic situation and why macro indicators are below expectations, urging corrective measures.
Ukraine drone strikes disrupt export hubs
April 2026
Continued Ukrainian drone strikes on key export hubs disrupted operations, limiting Moscow's ability to capitalise on higher energy prices.
Oil price dynamics and sanctions context
April 2026
Rising global oil prices, driven by tensions involving Iran, and the easing of some US sanctions created potential for higher earnings, but Russia has struggled to fully benefit.
Unemployment described as historic low
April 2026
The Bank of Russia chief noted unemployment remained around 2%, largely due to labour shortages caused by the ongoing war.
Bank of Russia rate cut noted in discussions
April 2026
The Bank of Russia had cut its key interest rate to 15% from 21%, a policy move referenced in the discussions of the economy.
Oil tax revenues fall in March
March 2026
Oil tax revenues in March declined sharply compared with the previous year.
Budget deficit widens in the first quarter
March 2026
Kremlin's budget deficit widened to about $58.6 billion in the first quarter of 2026.
GDP contracted 1.8% in January–February 2026
February 2026
Russia's GDP contracted by a combined 1.8% in January and February 2026, with sectors such as manufacturing, industrial production and construction showing negative growth.
Growth slows to 1% in 2025
2025
Growth slowed to 1% in 2025 as Moscow scaled back military expenditure amid falling oil revenues and widening deficits; government projections for 2026 had indicated about 1.3% growth.
Strong growth continued in 2024
2024
GDP rose 4.9% in 2024 due to defence-related spending and related activity.
Defence spending previously drove strong growth
2023
Heavy defence spending had earlier driven strong economic growth, with GDP rising by 4.1% in 2023.