Source link : https://london-news.net/recession-on-the-horizon-analyzing-the-prospects-of-the-russian-economy-amidst-inflation-and-market-stagnation/
The Russian economy has been on the verge of recession for several months, as financial authorities implement measures aimed at curbing growth to prevent runaway inflation.
In the first quarter of this year, Russia experienced its first quarterly contraction in GDP since 2022.
While official GDP data for the second quarter is still pending, analysts generally project that growth for this period will be around 0%, indicating that Russia narrowly escaped a technical recession—which is characterized by two consecutive quarters of GDP decline.
Economist Dmitry Polevoy estimates that Q2 growth is “close to zero after seasonal adjustments,” whereas Bloomberg reports that the Russian economy has seen a “slight quarter-on-quarter growth.”
Liam Peach from Capital Economics and Stanislav Murashov from Raiffeisenbank in Moscow have both forecasted a quarterly growth of 0.3% for Q2.
The slowdown in Russia’s economy is primarily the result of efforts to control inflation, which surged after the government increased spending to support the war and mitigate the effects of sanctions.
This increased expenditure raised demand, but supply has struggled to keep up due to labor shortages and elevated logistics costs linked to sanctions, contributing to rising prices.
The unpredictable high inflation complicates economic planning, prompting the Central Bank to raise interest rates to temper economic activity, which encourages saving and raises borrowing costs for…
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Author : rimmaruslan98@gmail.com
Publish date : 2025-09-02 15:49:00
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