In a New Year’s Eve address, Russian President Vladimir Putin offered reassurance to the nation, stating his belief that “everything will be fine,” despite ongoing military and economic challenges.
As 2025 marks the fourth year of Russia’s involvement in the Ukrainian conflict, President Vladimir Putin took the opportunity in his New Year’s Eve speech to address the nation’s concerns. While he conveyed optimism about the country’s future, he notably avoided providing concrete forecasts on the progress of the war in Ukraine or the broader economic outlook for Russia.
Putin’s speech, reported by The New York Times, emphasized overcoming challenges and cast 2025 as the “year of the Defender of the Motherland.” He paid homage to Russia’s “fighters and commanders,” but refrained from addressing the persistent inflation issues plaguing the economy, nor the broader economic struggles stemming from the ongoing war.
Russia is currently facing substantial military and economic uncertainty. According to a report by the Institute for the Study of War, Russia incurred approximately 427,000 casualties in 2024 while managing to gain 1,600 square miles of territory. Despite this, its military advances have slowed, capturing about seven square miles per day in December.
On the economic front, the costs affiliated with the invasion have soared. The Russian government has allocated 13.5 trillion rubles for defense spending in the upcoming year, constituting roughly a third of the federal budget. This heavy expenditure comes as private businesses face hardships due to capital flight and the migration of younger workers since the onset of the conflict.
The economic challenges are further exacerbated by inflation rates that exceed the central bank’s target of 4%. Interest rates have climbed to 21%, adding pressure to the already strained economic environment. Although President Putin has acknowledged the inflation issue in previous addresses, describing it as “alarming” and indicative of an “overheating” economy, he did not highlight these concerns in his New Year’s speech.
At the close of 2023, Putin expressed regret over the surging prices of household essentials, such as eggs, attributing the rapid price hikes to government inefficiencies. Economists predict 2025 to be a year fraught with economic difficulties, drawing parallels with the stagnation period experienced by the Soviet Union in the early 1980s.
TsMAKP, a Russian government-affiliated think-tank, has warned that Russia might be facing stagflation, a severe economic condition that combines high inflation, slow growth, and rising unemployment.
Putin’s message of assurance comes at a time of significant adversity for Russia. As the country navigates its ongoing military endeavors and economic challenges, the coming year will likely test the resilience of both the leadership and the population.
Source: Businessinsider
