Russian President Vladimir Putin arrives to deliver his annual state of the nation address in Moscow on February 20, 2019.

Russia began its annual St Petersburg International Economic Forum (SPIEF) on Thursday, an event at which it will try to boost its appeal to international businesses and investors.

Russia has been hit by five years of international sanctions on its economy following its annexation of Crimea and role in pro-Russian uprising in Ukraine. It is also not immune to the effects of the U.S.' trade war with China which is putting the brakes on global growth.

Frederic Oudea, president of the European Banking Federation and CEO of Societe Generale, told a Russian economy panel at SPIEF Thursday that while the country's finances were not faring too badly given the global environment, sanctions remained a hurdle.

"In this world of uncertainty … I think Russia has done pretty well in the last few quarters. Of course, the international sanctions remain an obstacle, a handicap to create more positive momentum and more structural confidence," he said.

A stalling in Russia's economy is borne out in the latest growth data that revealed the economy had slowed in the first quarter of 2019 to its weakest level since late 2017.

In May, Russia's Economy Ministry had already warned of lower growth in 2019, forecasting 1.3% this year. Meanwhile the Central Bank of Russia expects GDP to grow by 1.2 - 1.7% this year with both domestic and external factors hampering growth.

Finance Minister Alexei Kudrin, who also took part in SPIEF's inaugural panel was more pessimistic, predicting less than 1% growth in 2019. He also said Russia needed to improve the rule of law and that a lack of confidence in government was affecting investment.

"According to my forecasts, the growth potential is something close to 2% and I don't think we'll make 3% or above because we're not quite active enough in improving structural things … We have to implement a number of measures in order to increase confidence otherwise we cannot expect more investments."

Russian Finance Minister Anton Siluanov told the SPIEF panel Thursday that it was the aim of the government to boost economic and business activity and that lackluster growth in recent quarters had been expected due to tax changes. He conceded that Russia needed to boost structural reforms, however.

"We're just getting the national initiatives going to tackle the problems that we've never tackled (like) boosting exports, productivity, small and medium-sized business," he said.

"These are the spheres where our government is trying to resolve the problems we have. I'm sure this will give an additional impetus for growth but we're just at the beginning and it's not that simple," he said.