Even with a 1% Growth Rate, a "Victory Declaration" — Analyzing Putin's Economic Talk by the Numbers

The Art of Turning 1% Growth into a "Victory"

"The growth rate is only 1%—but that's the result of 'intentional deceleration.'" President Putin, during the annual year-end program for the public (known as "Direct Line"), spoke of the economic slowdown as evidence of control. Furthermore, he emphasized that despite the weakness in a single year, the economy grew by about 10% over three years—stretching the timeline to highlight "outperforming the West."focus.de

The essence of this method is simple. ① Choose a comparison target (Germany or the Eurozone), ② switch the period (single year → multiple years), and ③ introduce a value standard of "stability over speed." This is political communication that creates a winning strategy not through the numbers themselves, but through "how the numbers are presented."focus.de

However, "Questions from the Public" Stir Things Up

However, when issues like food prices, which affect daily life, are raised in the same forum, the tone suddenly becomes more realistic. "Families that buy more meat feel the price increases. Of course, it's not a good thing." Considering that the program is originally a "highly staged format" with carefully selected questions, such remarks feel rather out of place.focus.de

On the flip side, no matter how controlled the stage is, it's hard to disguise prices. Unlike GDP, which can be diverted to structural discussions, prices hit directly at the household level.

External Perspective: "Growing" Yet "Out of Breath"

The focus is not on "the Russian economy not collapsing." Far from collapsing, there are even phases where it appears to be "growing" on paper. The issue is whether this growth is the kind that leads to sustainable prosperity.
The IMF predicts a sharp slowdown from high growth in 2024 (4.3%) to 0.6% in 2025, and around 1.0% in 2026.IMF

The World Bank also indicates "a normalization of low growth," with 0.9% in 2025 and around 1% from 2026 to 2027.World Bank

In short, "it's not stopped, but its running power is declining." The metaphor of an "economy permanently at 30 km/h" mentioned in the FOCUS article aligns with this image of slow cruising.focus.de

The Challenge of a 16% Interest Rate Signaling "Not Normal Times"

A decisive sign is monetary policy. On December 19, 2025, the Russian Central Bank lowered the policy interest rate by 0.5% to 16%.Central Bank of Russia

The level of 16% itself is not needed for "stable growth" in normal times. The central bank has mentioned the high inflation expectations and the risk of tax changes pushing up prices, suggesting a prolonged tightening stance.Reuters

Here lies the "crack in the narrative." If it was "intentionally cooled," why can't the "weight" of interest rates be fully removed? It appears more like a struggle with constraints rather than control.

The Content of Growth: War Boosts GDP

The FOCUS article repeatedly raises the issue of "the quality of growth." National spending creates demand in areas like military supplies, logistics, repairs, mobilization, and related services, boosting employment and wages (at least partially).focus.de

However, this can easily lead to polarization in terms of household perception. Regions, companies, and individuals close to the military or defense-related sectors may prosper, while the private sector not involved faces suffocation due to high interest rates and rising costs. Moreover, even if military demand increases "current production," it tends to diverge from investments (technology, equipment, human resources) that enhance future productivity.

The "Ratio of War Expenses" Indicates Economic Distortion

A prominent German think tank, SWP, projects that Russia's defense budget for 2025 will expand to about 13.5 trillion rubles.Stiftung Wissenschaft und Politik (SWP)

The FOCUS article also introduces the view that military spending will reach 7-8% of GDP.focus.de

The larger the numbers, the more the allocation of national resources tilts towards the military. While it can function in the short term, the consequences often manifest as a decline in civilian investment, labor shortages, and inflationary pressures.

Sanctions Can Be Survived by "Detours," but They Are Not "Ineffective"

Russia has avoided the immediate impact of sanctions by restructuring procurement and exports through third countries.focus.de

On the other hand, the sharp decline in direct supply of machinery, equipment, and advanced products from the EU is gradually eroding the industry's capacity for renewal. As cited in the FOCUS article, there is a view that sanctions are a "long-term effective poison."focus.de

This dual structure of "short-term movement/long-term weakening" creates a divide in the evaluation of the Russian economy.

What Will Become the "Invoice" from Here On?

Immediate concerns include ① prolonged high interest rates, ② fiscal burdens, ③ worsening oil prices and export conditions, and ④ cash flow issues for banks and companies. In fact, there are reports suggesting that cracks may appear in Russia's wartime economy by 2026.The Washington Post

It's not a binary choice between "collapse" or "victory." The economy continues to run at a slow pace, but the real question is whether that running is "eroding the body"—and who will pay the price for it.

SNS Reactions (Trend Summary: Summary of Posts)

※Below is a summary of prominent points on SNS as Summary of Post Content (avoiding definitive quotes from specific accounts). It's important to read SNS with the understanding that it may contain misinformation.

① "Resource-Rich Countries Are Strong" Resilience Evaluation

The argument that "countries with their own food, energy, and resources won't easily break" and "war can continue even if growth is sacrificed" remains strong.Reddit

② "Even If GDP Grows, It Doesn't Lead to Prosperity" War Bubble Skepticism

The counterargument that "GDP driven by military demand is 'apparent growth'" and "private investment and living standards are declining" is prevalent. There is also much debate that measuring the effects of sanctions by "momentary wind speed" is itself a mistake.Reddit

③ "The Sanctions' Objectives Have Changed" Western Criticism and Irony

Posts with a mix of irony repeatedly question whether the sanctions aimed for immediate collapse or long-term deceleration, suggesting that the evaluation criteria are shifting.Reddit

④ "Ultimately, the Burden Falls on Households" Prices, Taxes, and Conscription Associations

There is also much discussion linking tax burdens, household pressure, and the financial aspects of recruiting soldiers. The view is that the hardships of life are tied to "mobilization for war."Reddit

⑤ "Even in a 'Controlled Program,' Prices Can't Be Hidden" Disillusionment with Staging

There is a reaction that views the format of programs like Direct Line as a "stage set" and focuses instead on the dissatisfaction of the public (such as food prices) expressed there.focus.de

Summary: Numbers Are More "Used" Than "Correct"

Putin's narrative doesn't so much twist numbers as it optimizes "which numbers to show," "over what period," and "compared to whom." Therefore, to counter it, one must juxtapose "evidence of constraints" like external forecasts (IMF, World Bank) and monetary policy (16% interest rate) and analyze the quality of growth—military bias, inflation, and dwindling investment.IMF

It's natural for SNS discussions to be divided. This is because the fact that "it's not broken" and the signs that "it's not healthy" coexist. The issue is how long it can continue running on painkillers—and who will pay the price for it.focus.de