The war against Ukraine set the Russian economy back four years during the first quarter after the full-scale invasion. The decline is less steep than initially anticipated, but Russia is still on track for one of the longest recessions in its history.
Bloomberg writes about it.
Russiaʼs economy, which showed signs of growth at the beginning of 2022, declined sharply in the second quarter. Data published on August 12 showed that the gross domestic product of the Russian Federation decreased by 4% year-on-year for the first time in a year.
Taking into account lost output, Russiaʼs GDP is now about the same as it was in 2018, according to Bloomberg Economics.
Sanctions imposed on Russia over the war in Ukraine have restricted trade and paralyzed industries such as the auto industry, while consumer spending has stalled.
The Bank of Russia predicts that GDP will shrink by 7% this quarter and possibly even more in the final three months of the year.
There are also risks for the Russian economy in the supply of energy resources. According to the International Energy Agency, the monthly decline in oil production will begin in August, and by the beginning of next year, the production of crude products in Russia will decrease by approximately 20%.