Russian President Vladimir Putin warned that Moscow is prepared to use the full range of its military capabilities, including its nuclear arsenal, if the country's Baltic exclave of Kaliningrad comes under direct attack.

Speaking Thursday at the Valdai Discussion Club in Moscow, Putin said Russia has no intention of launching attacks against European nations but emphasized that any military action targeting Russian territory would trigger a decisive response.

The remarks come after a series of NATO military exercises conducted near Kaliningrad. NATO has described the drills as defensive operations designed to strengthen regional deterrence, while Russian officials have criticized the exercises as escalating tensions. Moscow has also previously warned it would respond if access to the exclave were blocked by air or sea.

Putin pointed to increasing military activity in the Baltic region and growing discussions involving Kaliningrad, arguing that such developments have heightened security concerns for Russia.

He stated that if Russia faced a direct attack on Kaliningrad or other parts of its territory, the use of every available weapon in the country's arsenal would become a matter for consideration.

The Russian leader's comments come as the war in Ukraine continues into its fifth year. While Russia has intensified attacks on Ukrainian infrastructure and energy facilities ahead of winter, Ukraine has expanded long-range drone operations targeting Russian oil refineries and other strategic assets.

Putin acknowledged that the Ukrainian strikes have affected Russia's economy, estimating that the attacks reduced the country's gross domestic product by approximately 1%. He also said Ukrainian operations in the Black Sea had damaged or destroyed more than 100 Russian vessels, though he insisted Russia had responded with counterstrikes.

Despite recognizing the economic impact, Putin maintained that Russia's financial system remains stable and rejected suggestions that Moscow would alter its military objectives because of economic pressure.

Addressing members of Russia's newly elected parliament earlier in the week, Putin contrasted Russia's economic position with that of Ukraine, arguing that Russia was not dependent on foreign financial assistance.

At the same time, Putin reiterated that he would prefer the conflict to conclude through negotiations, while signaling that Russia remains committed to pursuing its military objectives.

According to Russian budget plans reviewed by Reuters, the government intends to increase defense spending to 17.1 trillion rubles (about $205 billion) in 2027, representing a significant increase from previous projections and one of the country's highest defense budgets since the start of the full-scale war in Ukraine.