Russian economy shrinks 4% due to effects of Western sanctions
The Russian is now 4% shorter than a year ago, according to new figures from the country’s national statistics agency.
Russia’s gross domestic product (GDP) for the second quarter of 2022 is equivalent to a sum equivalent to 96% of the value of the country’s economy in the second quarter of 2021, according to preliminary statistics from Rosstat.
Rosstat figures show retailer sales are down 9.8% and manufacturers’ sales are down 3.3%.
The contraction comes after Western powers hit Russia with a series of far-reaching sanctions aimed at damaging the Federation’s economy.
The sanctions have seen embargoes imposed on Russian energy products and bans on the import or export of certain goods.
The West has also made efforts to exclude Russia from the global financial system by blocking it from the Swift payment system.
Efforts to exclude Russia from the global financial system forced the country to default on its sovereign debt for the first time since the Bolshevik Revolution earlier this year.
The sanctions, coupled with public and political pressure in Europe, Britain and America, led to more than 1,000 multinationals leaving Russia.
The Russian economy was, however, supported by soaring commodity prices which caused the Russian ruble to reach its strongest point in seven years.
Seeking to avoid the adverse effects of sanctions, Russia has increasingly been forced to move away from Europe by selling oil and gas to China and India.
High energy prices mean Russia’s economy has shrunk at a slower pace than analysts predict, who forecast a 7% shrinkage in the Federation’s economy, after growing 3.5% in the first trimester.