Sanctions, soaring inflation, and a wartime economy: experts in Davos discuss Russia's future in 2025.

During the World Economic Forum 2025 in Davos, participants discussed the current economic state of Russia, which last year became the fourth largest economy in the world by purchasing power parity (PPP). Despite this figure, experts are warning of the threat of an economic crisis due to significant internal issues and the consequences of wartime.

This was highlighted at WEF 2025 in Davos.

Swedish Finance Minister Elisabeth Svantesson emphasized that the Russian economy appears more stable only on the surface, largely supported by Kremlin propaganda narratives. She stated, “Putin wants us to believe in the strength of the Russian economy, but inflation and other indicators suggest otherwise.”

According to Svantesson, the official inflation rate in Russia at the end of 2024 was 20–22%, and the country's Central Bank raised the key interest rate to 21%, reflecting the complexity of the situation. Furthermore, sanctions have significantly restricted Russia's access to modern technologies and defense materials.

Valdis Dombrovskis, the European Commissioner for Economy, noted that the European Union, despite challenges, has managed to reduce its energy dependence on Russia.

“Today, Norway and the United States have become the main gas suppliers for the EU, depriving Moscow of a tool for energy pressure,” he explained.

Dombrovskis also added that sanctions against Russia remain effective, but the process of coordinating them within the EU is complicated by the need for unanimity among the 27 member states.

The War and the 'Shadow' Fleet

Participants in the discussion paid special attention to the issue of the "shadow" fleet – the transportation of Russian oil, which, upon reaching countries like India, is eventually exported to Europe at reduced prices.

Svantesson called this situation a challenge for the EU: “We should be tougher in implementing sanctions. More pressure is needed on companies that indirectly support the Russian economy.”

Western Companies in Russia

Another important issue remains the presence of nearly 800 transnational corporations in Russia, despite the war and sanctions. Most of these are from the United States, Germany, and France.

Experts stressed that long-term investments in Russia remain risky. Svantesson noted that most of such resources are directed towards supporting the war, while the Russian economy suffers from a weakened ruble, high inflation, and capital flight.

Forecasts for 2025

According to the speakers, the economic and political stability of Russia continues to raise serious questions. Although the country shows some successes, experts agree that its dependence on a wartime economy and sanctions seriously undermine future growth.

It is noted that Russia's place in the world will depend on its ability to adapt to new economic conditions and the international community's response to the challenges it creates.

Background. Earlier, Mind reported that U.S. President Donald Trump tasked his special envoy to Ukraine, Keith Kellogg, with ending the war in Ukraine within 100 days.