Russia’s economy has shrunk by 1.9 per cent during the first quarter of 2023 according to Moscow’s latest reports. The official Russian statistics office Rosstat reported the near two per cent fall in GDP compared to the same period in 2018 on Wednesday
Early predictions had pointed to a larger decline in 2022, but Western sanctions enacted in response to Moscow’s deployment of troops to Ukraine in February caused the GDP to decline by 2.1 percent.
According to the economics ministry and central bank, the first quarter will contract by 2.2 percent and 2.3 percent, respectively, while Rosstat data show that the fourth quarter of last year saw a 2.7 percent decline.
The first quarter’s dip was mostly caused by a decrease in retail and wholesale goods turnover, while the manufacturing, agricultural, and construction sectors all experienced increase.
The International Monetary Fund (IMF) has forecast growth for Russia in 2023, but it has also issued a warning that for the foreseeable future, the country’s economic growth would be constrained by its isolation from the rest of the world and its declining energy earnings.
The Russian government is reportedly able to continue its “special military operation” in Ukraine despite sanctions by increasing military production and making considerable public expenditures.
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