Ukraine-Russia war latest: Kremlin says Russia on the verge of recession as Putin prepares to address economic forum

Russia’s economy minister has warned that the country is on the brink of recession.

Moscow was hit with a slew of sanctions after the Kremlin sent troops into Ukraine in February 2022, has so far outperformed predictions.

High defence spending has propelled growth and kept unemployment low despite fuelling inflation.

At the same time, wages have gone up to keep pace with inflation, leaving many workers better off.

Large recruiting bonuses for military enlistees and death benefits for those killed in Ukraine also have put more income into the country’s poorer regions.

But over the long term, inflation and a lack of foreign investments remain threats to the economy, leaving a question mark over how long the militarized economy can keep going.

Norway will raise overall spending on defence to 5% of GDP, its prime minister said on Friday, in line with a planned common goal among NATO states.

Nato Secretary General Mark Rutte has proposed that member nations should each agree to aim for spending 5% of their gross domestic product on defence and broader security measures when they meet from June 24-25 in The Hague.

“We must do more to secure our country and contribute to our common security with our allies in NATO,” Norwegian Prime Minister Jonas Gahr Stoere told a press conference on Friday.

“Security for Norway is about having a defence that is reliable, that has the right equipment, enough people and good plans,” he added.

Ukrainians prisoners of war (POWs) returned home on Friday following an agreed swap at an undisclosed location.

The German military deems Russia an “existential risk” to the country and Europe, according to a Spiegel news magazine report that cites a new Bundeswehr strategy paper.

The confidential document warns that the Kremlin is aligning both its industrial and leadership structures “specifically to meet the requirements for a large-scale conflict against Nato by the end of this decade.”

Russia is verifiably preparing for a conflict with NATO, particularly by strengthening forces in western Russia “at the borders with NATO,” the report cites the strategy paper as saying.

As early as next year, Russia could have around 1.5 million soldiers on active duty, according to the paper.

Russian President Vladimir Putin said on Friday that in his view the whole of Ukraine was “ours” and cautioned that advancing Russian forces could take the Ukrainian city of Sumy as part of a bid to carve out a buffer zone along the border.

Ukraine’s foreign minister denounced the statements as evidence of Russian “disdain” for US peace efforts and said Moscow was bent on seizing more territory and killing more Ukrainians.

Russia currently controls about a fifth of Ukraine, including Crimea, more than 99 per cent of the Luhansk region, over 70 per cent of the Donetsk, Zaporizhzhia and Kherson regions, and fragments of the Kharkiv, Sumy and Dnipropetrovsk regions.

“We have a saying, or a parable,” Putin said. “Where the foot of a Russian soldier steps, that is ours.”

Britain, along with Nordic-Baltic nations and other allies, pledged coordinated measures to further counter Russia’s so-called “shadow fleet” operating in the Baltic and North Sea, the UK foreign office said on Friday.

“If vessels fail to fly a valid flag in the Baltic Sea and the North Sea, we will take appropriate action within international law,” Britain and the Nordic-Baltic nations said in a joint statement.

The statement was issued after a meeting of representatives from Britain, Belgium, Denmark, Estonia, Finland, France, Germany, Iceland, Latvia, Lithuania, the Netherlands, Norway, Poland and Sweden.

Kremlin spokesman Dmitry Peskov has said that the date for the next round peace talks is expected to be agreed upon next week.

Kyiv officials have not recently spoken about resuming talks with Russia. The last talks were held when delegations met in Istanbul on June 2.

Ukraine continues to offer a ceasefire and support US-led diplomatic efforts to stop the fighting.

Russian President Vladimir Putin spoke with the National Security Advisor and Commander of the Royal Guard for the Kingdom of Bahrain, Nasser bin Hamad Al Khalifa, on the sidelines of the 28th Saint Petersburg International Economic Forum.

Russian drones slammed into two Ukrainian cities, killing at least one person in nighttime attacks, authorities said on Friday.

Russia’s overnight drone assault targeted the southern Ukraine port city of Odesa and the northeastern city of Kharkiv, hitting apartment blocks, officials said.

The barrage of more than 20 drones injured almost two dozen civilians, including girls aged 17 and 12, Ukraine’s President Volodymyr Zelenskyy said.