Story perspectives

Putin Slows Economic Growth to Combat Inflation Crisis

9/20/2025

Summary

Story summary

President Vladimir Putin announced a deliberate slowdown in economic growth to manage inflation and ensure stability.
He claimed the economy is not in recession, despite two quarters of GDP decline reported by the central bank.
GDP growth is expected to drop to about 1%, down from 4.3% last year, with inflation surpassing 8%.
Central Bank Governor Elvira Nabiullina supported this distinction between slowdown and recession.
The government is considering increasing the VAT rate from 20% to 22% to address a projected budget deficit exceeding 1.7% of GDP.

History

Historical Context

In 2014, Russia's annexation of Crimea led to severe economic sanctions from the U.S. and EU, resulting in a 3.7% GDP contraction. This economic strain has persisted, with President Putin announcing a GDP growth slowdown to 1% and inflation exceeding 8%. The proposed VAT increase from 20% to 22% underscores ongoing challenges, including budget deficits surpassing 1.7% of GDP.

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Story summary

President Vladimir Putin announced a deliberate slowdown in economic growth to manage inflation and ensure stability.
He claimed the economy is not in recession, despite two quarters of GDP decline reported by the central bank.
GDP growth is expected to drop to about 1%, down from 4.3% last year, with inflation surpassing 8%.
Central Bank Governor Elvira Nabiullina supported this distinction between slowdown and recession.
The government is considering increasing the VAT rate from 20% to 22% to address a projected budget deficit exceeding 1.7% of GDP.

1 / 2