Russia has officially entered an economic stagnation after its gross domestic product decreased by 4% in the third quarter, according to an initial evaluation published on Wednesday, the statistical agency “Rostat”.
This comes after it recorded in the second quarter a decrease of 4. 1%, and the decrease dates back to the effects of the severe Western sanctions imposed in the wake of military intervention in Ukraine.
Analysts had expected a noticeable decline in the economy between July and September, approximately 4. 5%.
According to “Rostat”, wholesale trade (-22. 6%), retail (-9. 1%), as well as shipping (-5. 5%) and the manufacturing (-2%) led to the decline in economic activity.
On the other hand, the construction (+6. 7%) and agriculture (+6. 2%) showed well.
The last recession in Russia dates back to 2020 and early 2021, two years that witnessed the Kofid-19.
The first three months of 2022 witnessed the growth of Russian GDP by 3. 5 %, but the start of the attack in Ukraine at the end of February led to international sanctions and many problems for the Russian economy, the most prominent of which is the decline of imports and exports, the exacerbation of workforce and difficulties in supplying spare parts.
According to the expectations of the Russian Central Bank on November 8, the GDP is expected to shrink about 3.
5% over the course of 2022, a rating far from the dark expectations that were expected in the spring.
The International Monetary Fund and the World Bank expect a similar decrease in GDP on an annual basis, by 3. 4 and 4. 5%.
Despite the shrinkage of economic activity, Russia is still officially in a full employment mode, as the unemployment rate reached 3. 9% in September, according to “Rostat”..
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