# Putin's "Russian Davos" Runs on Empty, Short on Growth Ideas > Introduction: an economic forum without a compass - Author: Maxime Marquette - Publisher: MadMax (https://mad-max.co) - Section: Editorial - Published: 2026-07-03 - Canonical URL: https://mad-max.co/en/article/editorial-le-davos-russe-de-poutine-tourne-a-vide-faute-didees-de-croissance ## Introduction: an economic forum without a compass ### Saint Petersburg hosts a fifth wartime forum **Vladimir Putin** presided, from **June 3 to 6, 2026**, over the fifth edition of the **Saint Petersburg International Economic Forum** held during wartime, a gathering nicknamed the **"Russian Davos"** that now struggles to conceal the structural exhaustion of the Russian economy, according to reporting from **Reuters**. The Russian government is exploring, according to **Reuters**, options such as reallocating labor toward sectors with greater growth potential and the rise of **artificial intelligence**-powered digital platforms in e-commerce and banking, measures that mainly betray the absence of a genuine recovery strategy. ### Why this editorial was necessary I am signing this editorial because this forum illustrates, better than any official speech, the scale of the economic wall now facing **Vladimir Putin**'s regime after more than four years of war against **Ukraine**. The growth figures, the quotes from economists, and the implicit admissions from Russian officials tell a story the Kremlin would rather keep quiet. This piece aims to demonstrate, using available data, that the Russian economic resilience so vaunted by official propaganda is now hitting its structural limits, without ever giving in to exaggeration or the invention of uncorroborated facts. ## Growth figures that don't lie ### A Russian economy in advanced stagnation The Russian economy grew by only **1 percent** last year, compared with **4.1 percent in 2024**, and it even contracted by **0.2 percent** in the first quarter of **2026**, according to data cited by **Reuters**. Current projections anticipate only **0.4 percent** growth for the current year as a whole, a paltry figure for a war economy supposedly running at full capacity. The **International Monetary Fund** and the **Institute for Economic Forecasting of the Russian Academy of Sciences** converge on similar estimates, around **1 percent** growth for **2026**, according to data reported by **The Moscow Times**, confirming that this is not a one-off anomaly but a structural slowdown trend. ### A stagnation even the Kremlin can no longer hide **The Moscow Times** sums up the situation bluntly: **Russia** is sliding from a "controlled cooldown" into outright stagnation in **2026**, with a significant recovery deemed unlikely before **2027** at the earliest, a finding that flatly contradicts the official narrative about the resilience of the Russian war economy. This prolonged stagnation means, in concrete terms, that the "euphoric effect" of massive military spending from the war's early years has now worn off, leaving behind an increasingly heavy economic bill for ordinary Russians. ## Troubling admissions from Russian economists themselves ### Quotes that betray the lack of solutions **Oleg Vyugin**, former deputy chairman of Russia's central bank, summed up the situation with rare candor for a former senior official: **"the government essentially lacks viable options to stimulate a recovery,"** according to remarks reported by **Reuters**. An admission worth more than all the Western analyst reports combined. **Anton Tabakh**, chief economist at the rating agency **Expert RA**, posed an equally revealing question: **"what can drive growth when consumption isn't supposed to rise, investment has been falling for two years, and fiscal policy is, at best, non-stimulative?"**, according to **Reuters**. ### Even the Duma worries about the real cost of the war Even more striking, a Communist member of the **Duma**, **Renat Suleimenov**, leveled a direct criticism at the very nature of war production: **"tanks and shells have no consumer value; even if the economy can produce them, the population cannot consume them,"** according to remarks reported by **Reuters**, a remark of rare clarity coming from an elected official within the system. These quotes, coming from sources inside the Russian system rather than hostile Western commentators, confirm that the economic unease now extends well beyond the circle of critical experts to reach official institutions themselves. ## Ukrainian drones, a formidable economic weapon ### A quarter of refining capacity hit Ukrainian drone strikes against refineries, fertilizer plants, and Russian ports have damaged roughly **a quarter of the country's refining capacity**, according to data reported by **Reuters**, raising concrete fears of fuel shortages during Russia's summer travel season. This Ukrainian strike campaign, carried out with a precision and consistency that command respect, demonstrates that **Kyiv** has developed a genuine ability to inflict a tangible economic cost on the Russian aggressor, far beyond the ground battlefield alone. ### Pressure compounding Western sanctions This direct military pressure on Russian energy infrastructure combines with **Western sanctions** that have widened the discount **Russia** must grant on its crude oil, according to **The Moscow Times**, a double squeeze that simultaneously erodes the country's budget revenue and its energy production capacity. The result of this combination is already visible in the budget figures: **2025** oil and gas revenues are expected at roughly **8.7 trillion rubles**, well below the **10.9 trillion** originally forecast by the Russian government, according to **The Moscow Times**. ## The price the Russian people will pay: higher taxes ### A VAT hike to fund the war effort The Russian government has decided to raise **VAT from 20 to 22 percent** starting **January 1, 2026**, while also lowering the annual revenue threshold requiring businesses to pay this tax, cutting it from **60 million to 10 million rubles**, according to **The Moscow Times**, a measure that will hit small businesses and ordinary consumers directly. The government also plans to introduce a tax on finished electronics, including laptops, smartphones, and lighting products, according to **The Moscow Times**, a new levy that illustrates the desperate search for new revenue sources to close the growing budget deficit. ### Military spending crushing the civilian budget Official defense spending will reach **12.93 trillion rubles**, or about **$161.6 billion**, in **2026**, according to **The Moscow Times**, but Defense Minister **Andrei Belousov** indicated that actual spending, including classified items, amounted to **7.3 percent of GDP** in **2025**, which would bring the total to nearly **$198.3 billion**. This massive military drain, combined with interest rates held around **16 percent** to contain inflation, leaves less and less budgetary room for civilian development, a trade-off **Vladimir Putin**'s regime imposes on its population without any real democratic debate possible. ## Missed chances for peace and their economic consequences ### Stalled negotiations that come at a cost According to **Reuters**, the peace negotiations launched with great fanfare in **February of last year** are currently stalled, largely because **U.S.** attention has now shifted to the situation in the **Middle East**, leaving potential American investment and a relaxation of Western sanctions in limbo, developments that had fueled some optimism in Russian business circles. A senior Russian banker, quoted anonymously by **Reuters**, stated that **Vladimir Putin** had missed an important opportunity to negotiate a deal last year, and that the economy is now beginning to show signs of instability that could have been avoided. ### The ambiguous role of Kirill Dmitriev **Kirill Dmitriev**, the chief liaison with the administration of American President **Donald Trump**, has emphasized the potential economic benefits of a peace deal, according to **Reuters**, a stance that betrays the economic urgency felt even within Russia's inner circles of power, despite the official rhetoric of unshakable defiance. This internal economic urgency contrasts sharply with the intransigence publicly displayed by **Moscow** on the military front, revealing a growing gap between the official posture of firmness and the increasingly precarious budgetary reality of the regime. ## What this forum reveals about Moscow's economic isolation ### A Davos without the major Western powers Unlike the real **Davos** forum, this **Saint Petersburg** gathering takes place without the presence of major Western economic powers, cut off from **Vladimir Putin**'s regime by sanctions imposed since the **2022** invasion of **Ukraine**, a diplomatic isolation that deprives **Russia** of the trade partners essential to any serious economic recovery. This structural absence of Western capital and technology largely explains why the Russian government finds itself reduced to exploring growth avenues as marginal as reallocating labor or developing internal digital platforms, lacking access to the foreign investment that once fueled its growth. ### Growing dependence on second-tier partners Deprived of its traditional Western partners, **Russia** is forced to deepen its dependence on partners such as **China**, **Iran**, and **North Korea**, alliances that offer neither the same level of investment nor the same technological access as the Western markets now closed to **Vladimir Putin**'s regime. This forced reorientation illustrates, according to several economic analysts, the fundamental strategic failure of **Putin**'s wartime gamble: in seeking to redraw the European order by force, he has pushed his own country toward an economic isolation whose consequences will be felt long after the eventual end of the conflict. ## The striking contrast with Ukraine's future reconstruction ### Two economic trajectories diverging radically While the Russian economy sinks into stagnation and tax hikes, **Ukraine**, despite the massive destruction inflicted by Russian aggression, benefits from the continued financial support of its Western partners and is already laying, according to several analysts, the groundwork for a postwar reconstruction backed by considerable international investment. This diverging trajectory between an isolated aggressor and a victim backed by Western solidarity illustrates, in the long run, the real strategic cost of the war chosen by **Vladimir Putin**, a gamble whose negative economic consequences could far outweigh any eventual territorial gains on the ground. ### The importance of maintaining Western financial commitment This economic contrast strengthens the case for maintaining, or even increasing, Western financial support for **Ukraine**, an investment that goes beyond the immediate war effort and also lays the economic foundations of a country destined to become, in time, a trade partner fully integrated into the European economic space. This long-term perspective should, in my view, guide Western budgetary decisions in the coming months, even as political fatigue over the length of the conflict tempts some European leaders to scale back their financial commitment to **Kyiv**. ## Conclusion: a showcase forum that fools no one anymore ### A staged production cracking under its own weight This fifth wartime "Russian Davos," despite its carefully orchestrated staging by the **Kremlin**, can no longer mask the reality of a Russian economy in deep stagnation, strangled by Western sanctions, undermined by Ukrainian strikes on its energy infrastructure, and forced to impose painful tax hikes on its own population. The admissions from economists, bankers, and even a **Duma** deputy confirm, with a candor rare for this regime, that the war waged by **Vladimir Putin** against **Ukraine** costs **Russia** far more than it brings in, despite the relative resilience it has shown so far. ### What the West should take away from this For the **West**, this finding should translate into a reinforced conviction: keeping up sanctions pressure and continuing to support Ukraine's strike capabilities against Russian energy infrastructure remains the most effective strategy for accelerating the economic exhaustion of a regime that only backs down under duress, never out of goodwill. This editorial will be updated as new Russian economic data emerges, with the same demand for factual rigor that guided this first analysis of the Saint Petersburg forum. **By Maxime Marquette, columnist** ## Columnist's transparency note ### Editorial stance I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies. I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events. ### Method and sources This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here. **Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies. **Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations. When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**. ### Nature of the analysis The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted. My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors. This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text. ## Sources ### Primary sources - [Reuters — Short on growth ideas, Putin hosts fifth wartime 'Russian Davos' — June 1, 2026](https://www.reuters.com/business/short-growth-ideas-putin-hosts-fifth-wartime-russian-davos-2026-06-01/) - [The Moscow Times — Russia's Economy in 2026: More War, Slower Growth and Higher Taxes — January 2, 2026](https://www.themoscowtimes.com/2026/01/02/russias-economy-in-2026-more-war-slower-growth-and-higher-taxes-a91579) ### Secondary sources - [Foreign Policy — analysis of the Russian war economy — 2026](https://foreignpolicy.com/) - [The Guardian International — coverage of Western sanctions against Russia — 2026](https://www.theguardian.com/international) - [The Kyiv Independent — coverage of Ukrainian strikes on Russian energy infrastructure — 2026](https://kyivindependent.com/) - [Al Jazeera — coverage of the Russo-Ukrainian war — 2026](https://www.aljazeera.com/tag/ukraine-russia-crisis/) --- Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/editorial-le-davos-russe-de-poutine-tourne-a-vide-faute-didees-de-croissance