The Russian economy slumped less severely in the spring than experts had forecast. Analysts blame the sanctions and a drop in domestic demand for the minus. Moscow, on the other hand, is keeping a low profile.
Following the invasion of Ukraine and sanctions imposed by the West, Russia’s economy plummeted in the second quarter. Gross domestic product (GDP) shrank by 4.0 percent from April to June compared to the same period last year, according to preliminary data from the Rosstat statistical office. At the beginning of the year, there was still an increase in GDP of 3.5 percent. Nevertheless, the decline was not as great as experts had expected. It is the first quarter that is completely shaped by the war against Ukraine that began on February 24th. As a result, Western countries in particular decided on far-reaching sanctions.
Rosstat did not provide any further information on the reasons for the drop. However, analysts attribute the cause to a drop in consumer demand and sanctions over Russia’s invasion of Ukraine.
Analysts had expected economic output to fall by seven percent in the second quarter. Western countries have responded to Russia’s war of aggression against Ukraine with comprehensive sanctions. The Russian government, on the other hand, speaks of a “special military operation”.
The Russian central bank recently forecast a 7.0 percent decline in economic output for the third quarter. In the final quarter, the decline could be even greater. The International Monetary Fund (IMF) expects a deep and long recession in Russia. Economic output in the country between Kaliningrad and Vladivostok is expected to shrink by 6.0 percent this year. For 2023, the fund expects a minus of 3.5 percent in GDP.
