ST. PETERSBURG – Russian media reported on Thursday that Russia’s economy is “on the verge of entering a recession,” according to the country’s economy minister.

During the St. Petersburg International Economic Forum, Economy Minister Maxim Reshetnikov issued this cautionary note. This annual event in Russia’s second-largest city is meant to showcase the nation’s economic strength and attract international investors.

The Russian business news outlet RBC cited the minister, stating, “The data suggests a slowdown, but our figures are like looking in the rearview mirror. Based on the current sentiments of businesses and the indicators, it seems to me that we are already on the verge of entering a recession.”

Russia’s economy, hit with a slew of sanctions after the Kremlin sent troops into Ukraine in February 2022, has so far outperformed predictions. High defense spending has propelled growth and kept unemployment low despite fueling 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.

Economists have warned of mounting pressure on the economy and the likelihood it would stagnate due to lack of investment in sectors other than the military.

Speaking at one of the sessions of the forum in St. Petersburg, Reshetnikov said Russia was “on the brink,” and whether the country would slide into a recession or not depends on the government’s actions.

“Going forward, it all depends on our decisions,” Reshetnikov said, according to RBC.

RBC reported Russia’s Finance Minister Anton Siluanov and Central Bank Gov. Elvira Nabiullina gave more optimistic assessments.

Siluanov spoke about the economy “cooling” but noted that after any cooling “the summer always comes,” RBC reported.

Nabiullina said Russia’s economy was merely “coming out of overheating,” according to RBC.