It is a fall that shows the impact of the economic sanctions taken against Moscow. Russia’s gross domestic product (GDP) shrank 4% in the second quarter compared to the same period in 2021, according to an official statistical estimate released on Friday. GDP rose “to 96% (of its value) in the same period in 2021, according to preliminary estimates,” statistics agency Rosstat said in a statement, adding that a more comprehensive assessment will be published on September 9.
These are the first figures from Rosstat on growth for a full quarter in Russia since the launch of Moscow’s offensive against Ukraine in late February. After the outbreak of this military intervention, Western countries imposed strong sanctions on Moscow that weigh on the Russian economy.
A contraction of at least 4% of GDP is expected in 2022
If the Russian GDP had registered in the first quarter of 2022 a growth of 3.5% in one year, according to Rosstat, the country is now sinking into a period of recession. Russia’s central bank said on Friday it expects GDP to contract between 4% and 6% in 2022, then between 1% and 4% in 2023, before rising from 2024.
“The decline in GDP will bottom out in the first six months of 2023,” Deputy Central Bank Governor Alexei Zabotkin said on Friday. “The economy is moving toward a new long-term equilibrium… With the transformation of the economy, growth will resume,” he added.
Western sanctions, targeting the energy and banking sectors in particular, have hit the Russian economy hard, impacting supply chains and exports. Inflation hit its highest level in two decades in April, before slowing. However, it remains high, reaching 15.10% in July over a year.
Source: BFM TV
