The Russian economy contracted steeply in the second quarter as the economic consequences of its war in Ukraine took hold.
The economy shrank 4 percent from April through June compared with a year ago, the Russian statistics agency said on Friday. It is the first quarterly gross domestic product report to fully capture the change in the economy since the invasion of Ukraine in February, when Western sanctions shut Russia off from much of the global financial system, and many countries severed trading relationships with Moscow. It was also a sharp reversal from the first quarter, when the economy rose 3.5 percent.
Even as imports to Russia dried up and financial transactions were blocked to the extent that the country was forced to default on its foreign debt, the Russian economy has proved more resilient than some economists initially expected. But analysts expect the economic toll to grow heavier as Western nations increasingly turn away from Russian oil and gas, critical sources of export revenue.
“We thought it would be a deep dive this year and then even out,” said Laura Solanko, a senior adviser at the Bank of Finland Institute for Economies in Transition. Instead, there has been a milder economic decline but it will continue into next year, putting the economy in a shallower recession for two years, she said.