The Russian economic system falls into recession, 8 months after the invasion of Ukraine

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  • Russia’s GDP fell 4% year-on-year in the third quarter of 2022, its second consecutive quarterly decline.
  • Which means the nation has fallen into a technical recession.
  • Senior Russian central banker Elvira Nabiullina acknowledged that the situation could get worse, according to Interfax.

Eight months after attacking Ukraine, the Russian economy has finally fallen into recession, according to official information from Moscow published on Wednesday.

Its GDP fell 4% in the third quarter of the year compared to the previous year, according to Rosstat, Russian Statistical Society. This followed a 4.1% year-on-year fall in its GDP in the second quarter – meaning the country fell into a technical recession after two consecutive quarterly contractions.

Although the textbook definition is not necessarily indicative of a critical slowdown – Russia’s GDP decline in the third quarter was more moderate than 7% decrease he had anticipated earlier – Elvira Nabiullina, the country’s top central banker, said on Tuesday the country wanted to look at the financial situation “very soberly with open eyes” and be ready for any growth, according to the news company Interfax.

“Of course, the situation can get worse, we know that,” Nabiullina advised Russian lawmakers, according to the news company, saying it was essential to restructure the economy.

Nabiullina’s assessment of the economy embraced months of escalating sanctions against Russia for its invasion of Ukraine. Global companies have left Russia en masse, while many of his foreign exchange and gold reserves have been frozen since the start of the conflict on 24 February.

And while firm energy prices had supported Russia’s economic system for some time, the tide seems to be turning – partly because of President Vladimir Putin’s decision partial mobilization order which sent many fleeing the draft. Analysis of Bank of Russia confirmed that the country’s financial year was at a standstill in September.

Russia’s central bank expects the country’s economy to contract by 3% to 3.5% in 2022, Nabiullina said on Tuesday, according to a statement. official transcript.

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