Russian President Vladimir Putin has made it clear that even if he believes a recession has begun, talking about it in public is off-limits.
His early-September clash with Sberbank chief Herman Gref, Economic Development Minister Maxim Reshetnikov and big business lays down the red lines for what can and cannot be said—for now.
You can discuss a “soft landing,” but talk of “stagnation” could bring punishment.
As with the terms “war” versus “special military operation,” authorities are trying to prevent panic.
At its core, the fight is over the Central Bank’s key rate, which Governor Elvira Nabiullina has begun to cut under pressure from state corporations and oligarch-linked business.
Gref says the plan is to go to roughly 14%, but he argues for deeper cuts - to at least 12% - to make credit cheaper and jump-start growth.
Putin counters that such a move would spark panic and instability by unleashing a sharp burst of inflation, and he urges trust in the Central Bank.
In other words, the dispute is fundamentally political; economics, as so often in recent years in Russia, is secondary. The economy is expected to be “fitted” to the leader’s plans. Those plans remain unchanged and amount to “war until capitulation.” Even U.S. President Donald Trump is now talking about a second round of sanctions on Russia, after Putin openly ruled out talks with Ukraine this year and appears intent on fighting longer.
For war, Putin needs not only a functioning defense industry but also a compliant society. Public sentiment already tilts toward ending the war as soon as possible—polls, while unreliable in precise figures, consistently point in that direction. If expectations of an inevitable economic collapse are layered on top of rising demand for peace, the national mood could start to resemble the Russian Empire in 1917—an outcome Putin clearly wants to avoid. Hence his orders for technocrats to keep their arguments behind closed doors and not alarm psychologically fragile business and consumers.
Experts say Russia’s economic difficulties are real.
The economy may not be falling into the abyss - and could even claw out of recession—but the “war-driven” growth model has run its course. The military-industrial complex can no longer pull the rest of the economy along. And the loans extended to defense firms are weighing on the banking system.
That leaves Putin denying reality and expecting technocrats to do the same. Two challenges follow - one obvious, the other secondary but more important. First: who’s right, Putin or the technocrats? Can the economy hold if, say, steelmakers warn of a crash reminiscent of the 1990s?
There’s no clear answer yet. But that uncertainty feeds the second challenge - the one Putin is trying to smother with silence: fear of a crash, now spilling into public view through statements by insiders who hope proximity to power shields them from repression.
That fear isn’t confined to the elite. It’s seeping down the social ladder. As the saying goes, collapse begins in the mind—and then spreads everywhere. Combined with growing impatience to end the war, this could produce deep disappointment after inflated expectations, as society shifts from a “profit-from-war” mindset many embraced in 2022–2023 to a “survive-and-hedge” strategy in case of a crash. That strategy, by itself, is already one step toward a crash.
Crucially, repression is more likely to fuel these sentiments than stop them. Which is why Russian authorities may soon have to rethink not only an exhausted growth model but also devise a new model for social stabilization - if they have the wherewithal to do it.
