Russian Economy Contracted at Worst Pace in Nearly 10 Years

Preliminary data showed that the Russian economy contracted by 8.5% on an annual basis in the second quarter of the year, with the country affected by the repercussions of the Coronavirus pandemic and the associated general isolation measures as well as the decline in oil prices, which is Russia’s main export commodity.

After growing 1.6% in the first quarter, the Russian economy slipped into deflation as the virus outbreak caused most corporate activities to stop, which prompted the central bank to cut interest rates to a record low.

The Federal Statistics Authority (Rosstat) said that the agricultural sector in Russia was the only one that recorded growth in the second quarter, while the primary goods, retail, transport and services sectors were hit hard.

According to the central bank, the Russian economy is likely to contract between 4.5% and 5.5% in the whole of 2020.