Drone strikes cast shadow over Russia’s economic forum

Russia's flagship economic forum in St Petersburg was meant to showcase resilience and confidence in the country's economy

Russia’s flagship economic forum in St Petersburg was meant to showcase resilience and confidence in the country’s economy. Instead, this year’s event unfolded under the shadow of Ukrainian drone attacks and continued uncertainty surrounding the war in Ukraine.

As delegates arrived for the St Petersburg International Economic Forum, thick black smoke could be seen rising above parts of the city after drones struck infrastructure near the venue. Local authorities confirmed damage had occurred but did not provide details about the specific targets. The attacks on both the opening and closing days of the forum served as a reminder that the conflict remains far from Russia’s borders.

The gathering also became a stage for renewed political messaging between Moscow and Kyiv. Ukrainian President Volodymyr Zelensky publicly invited Russian President Vladimir Putin to meet in a neutral country for direct peace talks. In his open letter, Zelensky criticised Russia’s conduct in the war while urging negotiations to end the conflict.

Putin quickly dismissed the proposal. Speaking at the forum, the Russian leader criticised the tone of the letter and reiterated his support for Russian forces fighting in Ukraine. His remarks suggested that Moscow remains unwilling to enter negotiations unless its own conditions are met.

Throughout the event, Putin projected confidence about both the war and the Russian economy. Addressing business leaders, officials and foreign guests, he argued that despite sanctions and ongoing military operations, Russia had maintained economic stability. According to the president, the country continues to develop even under mounting international pressure.

However, challenges facing Russia were difficult to ignore. The war has entered its fifth year and continues to consume vast financial and human resources. At the same time, Ukrainian drone strikes have reached deeper into Russian territory, exposing vulnerabilities that were rarely discussed publicly in the early stages of the conflict.

When questioned about the war, several senior Russian officials echoed Kremlin talking points rather than offering independent assessments. Their responses highlighted the strong influence of the central government on public messaging regarding the conflict.

Economic concerns were also evident beneath the optimistic atmosphere of the forum. While Russia’s economy has avoided collapse despite extensive Western sanctions, many economists warn that growth has slowed significantly. Some sectors are experiencing stagnation, while others have entered decline as the costs of war continue to rise.

Business owners from different regions have reported increasing difficulties. High borrowing costs, labour shortages and reduced access to foreign markets have created obstacles for many companies. Even so, some industries are finding new opportunities. Domestic tourism, for example, has expanded as international travel becomes more difficult for many Russians.

Government officials acknowledged certain economic pressures but stressed that the country has shown resilience. They argued that many foreign predictions about Russia’s economic downfall have failed to materialise.

The forum also attracted attention through a range of unusual displays and guests. Exhibition halls featured everything from advanced technology projects to entertainment attractions designed to draw visitors. Russian organisers also highlighted the presence of several foreign attendees in an effort to demonstrate continued international interest.

Despite those efforts, the combination of drone attacks, wartime pressures and economic uncertainty overshadowed much of the event. While Russian leaders sought to project an image of strength and stability, the developments surrounding the forum underscored the challenges the country continues to face.

For investors watching from abroad, the message was mixed. Russia remains standing despite years of conflict and sanctions, but ongoing instability and security concerns continue to raise questions about its long-term economic outlook.