(Bloomberg) — Russia’s financial system contracted 2.1% final yr, defying the worst fears of a serious recession as surging commodity exports helped offset the impression of US and European sanctions imposed over President Vladimir Putin’s invasion of Ukraine.
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The preliminary outcome was higher than the three% decline officers anticipated as not too long ago because the early fall and much wanting the ten% drop some forecasters noticed when the sanctions first hit simply over a yr in the past.
Hardest-hit have been wholesale and retail commerce, in addition to manufacturing and transport, the Federal Statistics Service stated on Monday, whereas mining, agriculture, development and authorities spending grew final yr.
Putin’s Conflict to Lop $190 Billion Off Financial system in Delayed Reckoning
“It’s a superb outcome,” stated Dmitry Polevoy, economist at Locko Financial institution. “However that is all up to now. What issues is the longer term and right here there are nonetheless few causes for a restoration. Within the base case for 2023, we nonetheless see a small contraction of 1%-2%.”
The central financial institution initiatives development could resume this yr. Bloomberg Economics estimates that the financial system will lose $190 billion in gross home product by 2026 relative to its pre-war trajectory.
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