Russia's economy is teetering on the edge of a recession, Economy Minister Maxim Reshetnikov warned on Thursday, as reported by Russian media outlets. The announcement was made during the St. Petersburg International Economic Forum, an annual event intended to showcase Russia’s economic strength and attract foreign investment.

Speaking at the forum, Reshetnikov stated that current data suggests a slowdown in economic activity. He emphasized, however, that these figures offer only a retrospective view. “Based on how businesses are currently feeling and key indicators, it seems to me that we are already on the brink of recession,” he said, according to Russian business publication RBC.

Despite facing extensive sanctions since Russia's military intervention in Ukraine began in February 2022, the economy has performed better than many analysts initially forecast. Strong defense spending has driven economic growth and kept unemployment levels low, even though it has contributed to inflation. At the same time, rising wages have helped workers maintain purchasing power, with some even seeing improvements in living standards.

Incentives like generous enlistment bonuses and compensation for soldiers killed in Ukraine have also funneled more money into economically disadvantaged regions. Still, economists caution that this military-driven economic momentum is unsustainable in the long run. A lack of foreign investment and persistent inflation pose serious risks to future stability, particularly as non-military sectors continue to see limited growth.

During the forum, Reshetnikov stressed that the country's future economic path depends heavily on government policy decisions. “It all depends on our decisions going forward,” he said.

In contrast, other top officials painted a more hopeful picture. Finance Minister Anton Siluanov acknowledged the economic "cooling" but compared it to a seasonal cycle, saying, “after any cooling, summer always comes.” Central Bank Governor Elvira Nabiullina also downplayed the concerns, suggesting the economy was simply “coming out of overheating,” rather than heading into a full-blown downturn.