Russian economy shrinks 4% in Q2 due to sanctions











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MOSCOW (Reuters) – Russia’s economy contracted 4.0% year-on-year in the second quarter of 2022, the first full quarter since Russia launched the Moscow-qualified invasion of Ukraine of “special military operation”, preliminary data from the Rosstat Federal Statistical Service show on Friday.

Rosstat did not provide details but analysts said the contraction was caused by weak household demand and the consequences of sanctions imposed on Russia by the West and some allied countries since the invasion, which began on 24 february.

“Data for June suggests that the contraction of the Russian economy appears to have bottomed out as the situation in some industries stabilizes,” said Sergey Konygin, an economist at Sinara Investment Bank.

The contraction in gross domestic product in the second quarter was not as large as expected. Analysts polled by Reuters on average had expected GDP to decline 7% year-on-year in April-June, after growth of 3.5% in the first quarter.

Central bank analysts had expected GDP to contract 4.3% in the second quarter, and said the decline could reach 7% in the third quarter. A recovery of the economy is expected in the second half of 2023, according to the central bank.

In a very unstable political environment, official forecasts regarding the depth of the recession in Russia vary widely.

Russia’s Economy Ministry said in April that the country’s GDP could fall by more than 12% this year – after growing 4.7% in 2021 – which would have been the biggest contraction since the mid-1990s. 1990.

In April, the Russian central bank estimated that GDP would contract 8-10%, but last month it revised its forecast to a contraction of 4-6%.

(Reuters report, French version Dagmarah Mackos)










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