Putin admits that the Russian economy is spiraling

In a rare moment of candor, Putin acknowledged that the Russian economy is under severe strain. Even “official” inflation data remains stuck above 10%, GDP growth is slowing sharply, and liquidity is vanishing from the system.

At a recent economic meeting, the Kremlin admitted that bank lending is collapsing—business loans shrank by 680 billion rubles in Q1 2025, while personal loans dropped another 192 billion. Construction and infrastructure projects are being hit especially hard.

To paper over the cracks, the government boosted spending by 25% in just three months. The result? A budget deficit of 2.2 trillion rubles—double what the Finance Ministry expected for the entire year.

Putin is now calling the economic deceleration a “soft landing.” In reality, GDP growth dropped to just 1.9% in Q1—less than half the rate in 2024. Inflation has not been brought under control, and the so-called plan is unraveling.

The ruble’s recent strength, while politically convenient, is punishing exporters and slashing their tax contributions. Meanwhile, falling oil prices are threatening the regime’s main source of revenue: April’s price for Urals crude fell to $53, far below the $69.70 assumed in the federal budget.

Even the war economy isn’t delivering. Russia’s Industrial Production Index is down—including in the military sector.

Putin’s global terror campaigns are sapping the Russian economy, they are running out of tools, out of money, and out of time.