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Russian Economy Shrank 2.1% Last Year, Less Than Once Expected

Russia’s economy contracted 2.1% last year, defying the worst fears of a major recession as surging commodity exports helped offset the impact of US and European sanctions imposed over President Vladimir Putin’s invasion of Ukraine.
Bloomberg
By Bloomberg
20 Feb
Reaction as Biden's First Round of Russian Sanctions Fail to Shock Shoppers pass the State Historical Museum, right, and the GUM luxury department store on Red Square in Moscow, Russia, on Wednesday, Feb. 23, 2022. U.S. President Joe Biden's debut set of sanctions on Russia for its actions over disputed Ukrainian territory hit markets with a whimper and were quickly criticized as limited in scope.

The preliminary result was better than the 3% decline officials expected as recently as the early fall and far short of the 10% drop some forecasters saw when the sanctions first hit just over a year ago.Hardest-hit were wholesale and retail trade, as well as manufacturing and transport, the Federal Statistics Service said on Monday, while mining, agriculture, construction and government spending grew last year.

Putin’s War to Lop $190 Billion Off Economy in Delayed Reckoning

“It’s a good result,” said Dmitry Polevoy, economist at Locko Bank. “But this is all in the past. What matters is the future and here there are still few reasons for a recovery. In the base case for 2023, we still see a small contraction of 1%-2%.”

The central bank projects growth may resume this year. Bloomberg Economics estimates that the economy will lose $190 billion in gross domestic product by 2026 relative to its pre-war trajectory.

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