Abstract. Russian economy has succeeded to maintain a positive growth momentum in 2019, although in absolute figures its achievements were rather unimpressive. The fact that GDP growth has declined to some 1.3 per cent (as compared with 2.3 per cent in 2018) even in the absence of new important sanction-related decisions shows that Russian economy still fails to find its way out of the stagnation trap. The first signs that this trap was being formed have been evident as early as in 2012—2013, even before the outbreak of sanctions. Since 2016, it became the dominant feature of Russia’s economic development. The article addresses key challenges associated with the stagnation trap and argues that getting out of it would suggest supporting private rather than government spending.