Kremlin denies Trump’s warning that Russian economy set to ‘collapse’

The Kremlin on Wednesday dismissed Donald Trump's warning of Russian economic collapse, asserting its "considerable reserves" and strength to achieve President Vladimir Putin's goals.

Mr Trump had stated that Putin should settle the Ukraine war, which he claimed was making Russia "look bad", also mentioning "long lines waiting for gasoline" and predicting the Russian "economy is going to collapse".

Kremlin spokesman Dmitry Peskov, while not directly commenting on Mr Trump's remarks, said Putin was open to ending the war and Moscow was grateful for Mr Trump's efforts.

"As for the Russian economy, it has a sufficient and considerable margin of safety to allow the country's leadership and all of us to implement the plans that we set for ourselves," Mr Peskov told reporters.

He also clarified the BRICS grouping, called "an attack on the dollar" by Mr Trump, was never aimed at other countries or their currencies.

Russia's economy is slowing sharply this year and the government forecasts gross domestic product (GDP) growth of 1.0 per cent after 4.3 per cent growth in 2024 and 4.1 per cent growth in 2023, though the International Monetary Fund has downgraded its 2025 forecast to 0.6 per cent from 0.9 per cent.

During Putin's first two terms as president from 2000 to 2008, Russia's economy soared to $1.7 trillion from less than $200 billion in 1999. But Russia's nominal GDP is now $2.2 trillion, about the same level it was in 2013, the year before Russia annexed Crimea.

With Russia and Ukraine locked into a draining drone and artillery war of attrition for a fourth year, the economy is becoming a major area of competition between the West and Russia.

Ukraine's Western supporters say that Russia's economy is weaker than it looks and if pressure is increased then the pain of ordinary Russians will force Putin to change course.

The Kremlin says that the economy is being slowed on purpose to stop overheating and far outperformed the G7 average over 2023 and 2024 despite the most onerous sanctions ever imposed on a major economy.

Asked about Trump's remarks at an energy conference in Moscow, Deputy Prime Minister Alexander Novak, who oversees energy and the economy for the government, said that Russia had a stable supply of gasoline.

"We have a stable domestic market supply, we see no problems in this regard," Novak said.

"The balance is maintained between production and consumption, and we, on the part of the government and the relevant ministries, are doing everything to ensure that this remains the case."

Double-digit interest rates deterred the biggest Russian retailers from buying up gasoline in the winter months when there was a surplus and then a series of Ukrainian drone attacks knocked out a chunk of Russian refinery capacity.

That led to some gasoline shortages in regions in the periphery of Russia, the world's second largest oil exporter, though the government has moved swiftly to prioritise supplies to regions with shortages.