Russia’s economy is officially in recession

Russia’s economy is officially in recession
(Source: medcom)

Jakarta, IO – Russia has reportedly fallen into recession nine months after it launched a military offensive against Ukraine.

A recession is defined as economic contractions for two consecutive quarters. Russia’s GDP shrank by 4 percent in Q3 after growth fell by 4.1 percent in Q2, reported CNBC Indonesia, Friday (18/11).

The contraction was driven by a 22.6 percent decline in wholesale trade and 9.1 percent decline in retail trade, further exacerbated by Western sanctions which restricted its exports and imports, including major manufacturing components and spare parts.

Russian companies also suffered from a shortage of workers due to military conscription ordered by President Putin. Rosstat, the national statistics agency, notes that the Russian economy is increasingly dependent on energy exports, which account for about 40 percent of its revenue.

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On November 8, Russian central bank predicted that the country’s full-year GDP will contract by 3.5 percent. The IMF and the World Bank similarly projected Russia’s GDP to fall by 3.4 percent and 4.5 percent, respectively. (un)