Russia's economic system is experiencing a pointy slowdown in development, in line with a report launched by the governmental statistics company Rosstat on Could 16.
Gross home product (GDP) solely grew by 1.4% within the first quarter of 2025 – a notable decline from 4.5% development within the earlier quarter and 5.4% in the identical interval final yr, the Moscow Occasions reported, citing Rosstat knowledge.
The newest knowledge from Rosstat got here in under expectations: the Russian Financial Improvement Ministry estimated GDP development at 1.7% and Bloomberg analysts predicted 1.8% development.
In accordance with Egor Susin, an govt from Gazprombank (the third largest financial institution in Russia, presently below sanctions), Rosstat's knowledge present a "sharp slowdown within the economic system."
In comparison with final quarter, the economic system has already contracted 0.4% – the primary such decline since 2022, in line with Raiffeisenbank.
Different analysts level to Central Financial institution insurance policies, sanctions, provide difficulties, and excessive inflation as causes for the economic system's decline.
Furthermore, "the state of affairs is sophisticated by low oil costs," Raiffeisenbank analysts observe, as oil and fuel revenues fell 10% from January to April.
A current report from the Stockholm Institute of Transition Economics (SITE) additionally revealed that, regardless of narratives from the Kremlin, Russia’s economic system is below rising pressure from its conflict in Ukraine and Western sanctions.
As Moscow and Kyiv focus on potential peace deals, the Russian economic system might face one other shock if army spending is decreased. Conversely – if peace talks fail – Europe and the USA might impose further sanctions on Russia, placing additional pressure on its economic system.
The Kyiv IndependentTim Zadorozhnyy
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