Support The Moscow Times!

Russian Economy Shrank 10% in Second Quarter – Central Bank

Oil production cuts outweighed recent recovery in other parts of economy.

Russia faces a lengthy recovery from the economic fallout of the coronavirus. RBC / TASS

The Russian economy contracted by 9.5-10% in the second quarter, the Central Bank estimated in a new report Wednesday.

The country’s economic recovery will be “gradual, lengthy and uneven,” with the spillover effects of disruptions to production and supply chains still expanding, the bank added.

Many sectors of the economy reached their nadir in April and started to recover in May, with the easing of restrictions following Russia’s six-week lockdown imposed at the end of March. However, the Bank said drastic cuts to oil production as part of the OPEC+ deal designed to prop up global oil prices “outweighed” growth in other parts of the economy.

Russia slashed its oil output by around 2.5 million barrels a day, or more than a fifth, under the terms of the April agreement with Saudi Arabia and a host of other oil-producing countries.

The International Monetary Fund (IMF) expects Russia’s economy to shrink by 6.6% this year — less than some of the worst-hit countries in western Europe which are facing double-digit contractions.

Russia’s Central Bank will decide next week on what to do with interest rates, which it slashed to a record low of 4.5% in June in a bid to stoke Russia’s economic recovery. Inflation is set to stay well below the Bank’s 4% target, with governor Elvira Nabiullina having signalled to the market that interest rates are likely to be cut again in 2020.

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Continue

Read more