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Russia’s Economy Contracts Sharply as War and Sanctions Take Hold


The Russian economy shrank sharply in the second quarter as the economic consequences of the war in Ukraine remained.

Russia’s statistics agency said the economy shrank 4% from April to June from a year ago. It is the first quarterly gross domestic product report that fully captures the change in the economy since the invasion of Ukraine in February, when Western sanctions knocked Russia out of much of the system. the global financial system and many countries cut off trade relations with Moscow. It is also a sharp reversal from the first quarter, when the economy grew 3.5%.

Even if imports into Russia dry up and financial transactions are so blocked that the country forced to pay foreign debtRussian economy has proved more resilient than initially expected by some economists. However, analysts expect the economic damage to worsen as Western nations increasingly turn away from Russian oil and gas, a key source of export revenue.

“We think it will be a deep dive this year and then even beyond,” said Laura Solanko, a senior adviser at the Finnish Banking Institute on Economies in Transition. go out. Instead, there has been a milder economic slowdown but it will continue into next year, sending the economy into a shallower recession for two years, she said.



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