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The
economy is plunging into recession after Moscow sent its armed
forces into Ukraine on Feb. 24, triggering sweeping Western
restrictions on its energy and financial sectors, including a
freeze of Russian reserves held abroad, leading scores of
Western companies to quit the market.
Rosstat did not provide any further details but analysts said
the contraction had been caused by weakness in consumer demand
and the aftermath of sanctions.
"June data suggests the contraction in the Russian economy seems
to have bottomed out as the situation in some industries is
stabilising," said Sergey Konygin, an economist at Sinara
Investment Bank.
The second-quarter contraction in gross domestic product was not
as deep as expected. Analysts polled by Reuters had on average
forecast GDP would shrink 7% year-on-year in April-June after
expanding 3.5% in the first quarter.
The central bank's analysts had expected GDP to contract 4.3% in
the second quarter, saying it was on track to fall 7% in the
third quarter. The central bank projects the economy will start
recovering in the second half of 2023.
Given the highly volatile political environment, official
forecasts for the depth of Russia's recession vary.
The economy ministry said in April that gross domestic product
could fall by more than 12% this year - after growth of 4.7% in
2021 - in what would have been the biggest contraction since the
mid-1990s.
But forecasts have softened since then as Russia pushes back
against restrictions.
The central bank predicted in April that GDP would shrink
8%-10%, but last month revised that to forecast a 4%-6%
contraction.
"GDP contraction will reach its bottom in the first half of
2023," central bank deputy chairman Alexei Zabotkin said on
Friday. "The economy will move towards a new long-term
equilibrium."
(Reporting by Reuters; Editing by Kevin Liffey)
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