SPIEF’26 highlighted Russia’s growing economic troubles

The annual St. Petersburg International Economic Forum 2026 (SPIEF’26), which Russia held from June 3 to June 6, has long lost the goal of attracting international investors and celebrating lucrative joint ventures with Western corporations attracted by low taxes and one-time unimpeded capital flows.

Conversations about investments at the event last week were awkward since the official data for investments in fixed assets in the first quarter of 2026, which Rosstat released just before the forum, showed a 14.3 percent decline compared with the same period in 2025 (The Moscow Times, June 4). Russian Minister of Economic Development Maxim Reshetnikov claimed this decline was a statistical incident not representative of gross domestic product (GDP) and promised that these investments would “smooth out” over time (Interfax, June 4). The economic forum’s key sessions firmly avoided discussions on the depth and duration of the unfolding economic recession in Russia, to the point that even mainstream media dared to criticize the trivial discourse amid the collapse of investments in Russia (Nezavisimaya Gazeta, June 4). Some observers thought the event’s theme—“Pragmatic dialogue: The path to a stable future”—hinted at a possible easing of the Kremlin’s unwavering commitment to continuing its deadlocked war against Ukraine, but the forum resolutely extinguished any such hopes (SPIEF’26, 3-6 June).

The keynote session with Russian President Vladimir Putin dismissed any notion that the forum would signal some intention to de-escalate hostilities (Riddle, June 6). Ukrainian drone strikes in the morning of the forum’s opening delivered a momentous foreword to Putin’s address, and arriving guests observed a dense cloud of smoke (Meduza, June 3). Several oil terminal attacks in the days leading up to the forum followed the pattern of systematic Ukrainian attacks on Russian energy infrastructure, which has caused shortages at gas stations in many regions, including in St. Petersburg (Fontanka.ru, June 2; The Bell, June 5). On June 3, Ukrainian drones set fire to the Russian navy’s Boikiy corvette ship, which was undergoing repairs in the Kronstadt dry dock (Meduza, May 5).

The Kremlin reportedly instructed Russian media to downplay the strikes. Putin still found it necessary to say that only a few foreign-supplied drones made some occasional hits, claiming that Russia had a strong air defense system and Ukraine does not (Kommersant, June 4). The follow-up attack on St. Petersburg on the last day of the forum, in which Ukrainian drones hit a naval arsenal and a submarine design bureau, proved him wrong (Current Time, June 6).

The main message of Putin’s keynote address was that the war is going in Russia’s favor and the army is on the offensive every day. Putin asserted the Russian army recently captured some 2,440 square kilometers (942 square miles), a bold departure from reality (RBC, June 4; NV.ua, June 5). In response to a long open letter from Ukrainian President Volodymyr Zelenskyy proposing a ceasefire and a face-to-face meeting, Putin told soldiers at the front lines to “Keep working, brothers” (Vzglyad; TopWar.ru, June 5). Putin lengthily explained his rejection of Zelenskyy’s meeting proposal, arguing that Kyiv was merely desperate to avoid a looming defeat (Kommersant, June 5).  Zelensky’s June 4 letter argued that the nature of the war is changing, notably in tune with Putin’s speculations about a “new quality” of the hostilities (TASS, June 2; Gazeta.ru, June 6). Putin may have only a vague articulation about the fast transformation of the war, but even Russia’s jingoist commentators cannot ignore the impact of Ukrainian middle-range strikes, which have turned the supply route to Crimea into a “road of death” (Tsargrad, June 4). At the same time, Ukrainian long-distance strikes are eroding Russia’s economy, and the accelerating introduction of Ukrainian unmanned ground vehicles and combat robots are giving Kyiv a new tactical edge in battles (Re: Russia, June 2; The Insider, June 5).

The shift of the tide of war in Ukraine’s favor makes it urgent for Moscow to engage in peace talks. Zelenskyy argues that waiting for U.S. attention, which is presently focused on Iran, makes little sense (Radio Svoboda, June 5). Putin, to the contrary, persists with referring to agreements allegedly made with U.S. President Donald Trump at the Anchorage summit in August 2025, even if Washington has stated that no understanding on Russia’s full control over Donbas was reached (RBC.ru, May 13; Vedomosti, June 4). Europe has taken on the main burden of supporting Ukraine and is preparing to open a “window for dialogue” with Russia together with Zelenskyy, who travelled to London on June 7 for talks with the leaders of France, Germany, and the United Kingdom (Lenta.ru, June 3; Izvestiya, June 8). Putin has expressed interest in exploring these opportunities but also argues that Europe cannot play the role of a mediator because it is entirely on Ukraine’s side (Versiya.ru, June 4). His mixed messages are meant to exacerbate disagreements inside the European Union, specifically concerns about the reductions of U.S. commitments in Northern Europe (RIAC, June 5). Russian strategic planning indicates that northern Europe would be the most likely theater in a confrontation with the North Atlantic Treaty Organization (NATO) (Rossiiskaya Gazeta; Novaya Gazeta Europe, June 5; KP.ru, June 6).

Putin’s fixation on subjugating Ukraine and prevailing in his confrontation with Europe departs far from the preferences of the bureaucratic and business elites that flocked to St. Petersburg expecting to get at least some value for the pricey entry tickets. For Putin, their attendance was a  manifestation of loyalty, which was habitually provided, but the background of drone attacks exposed the cracks of this performance.

• Pavel K Baev is a Research Professor at PRIO
• This text is also published by Eurasian Daily Monitor