Russia’s Vladimir Putin will address a flagship investment forum in Saint Petersburg on Friday, as the war in Ukraine drags the economy into stagnation and days after brazen Ukrainian drone strikes rocked his home city. Russia’s offensive has led to rising prices, tax hikes, two-decade-high borrowing costs, business shutdowns and labour shortages, putting the economy in its trickiest spot since the start of the war in 2022.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. Meanwhile, intensifying Ukrainian attacks on Russia’s vital energy infrastructure -- oil depots, refineries, exporting hubs -- are threatening to dent Moscow’s most important income stream. In a highly symbolic strike, one attack hit a facility in Saint Petersburg as the conference opened on Wednesday, with arriving dignitaries greeted by a plume of back smoke in the background. “The Russian economy is entering a stagnation, with high interest rates and high inflationary pressure,” Alexander Kolyandr, a London-based Russian economy expert, told AFP on the eve of Putin’s speech. “I don’t see the Russian economy entering the 1990s or something similar, it’s just a slow degradation of everything,” he added. Russia’s GDP contracted by 0.2 percent in the first three months of the year, according to official statistics -- the first quarterly slump in three years. And the government posted an $80 billion budget deficit in the first four months of 2026 -- equivalent to 2.5 percent of annual GDP and more than was planned for the entire year.