Russia's economy shrank last year by less than had been expected given its invasion of Ukraine
- last year
Russia's economy shrank last year by less than had been expected given its invasion of Ukraine, figures suggest.Russia's economy proved unexpectedly resilient in the face of tough Western sanctions last year, but a return to pre-conflict levels of prosperity may be far off as more government spending is directed towards the military.
Russia’s economy shrank by 4 percent year-on-year in November of 2022, easing from an upwardly revised 4.5 percent contraction in the previous month. It was the seventh consecutive monthly contraction in the Russian economy, pressured by weaker domestic demand due to sweeping Western sanctions in retaliation to Moscow’s invasion of Ukraine. In its latest policy decisions, the Central Bank of Russia also cited labor shortages due to the military mobilization as constraints to the growth of the Russian economy. Considering the January-November of 2022, the economy decreased by 2.1% compared to the same period of the previous year
The economy contracted by 2.1%, according to the country's statistics agency, but this was less than an earlier prediction of a 12% fall.
While questions have been raised about the reliability of the data, many commentators have been surprised at the Russian economy's resilience.High oil prices and military spending have helped to support the economy.After the invasion, hundreds of Western firms
withdrew from Russia. The initial shock forced the stock market in Russia to close temporarily and saw the rouble tumble as people queued up at cash machines.
The Institute for International Finance had predicted the Russian economy would shrink by 15% in 2022 and last March, US President Joe Biden said it was "on track to be cut in half".
However, for most of 2022, Russia was able to continue exporting energy.
Western limits to energy exports were only applied gradually during the year, and while imports to Europe fell sharply during the year, a steady stream of buyers in China, India and elsewhere stepped in to buy up the oil which Europe would not.
Russia’s economy shrank by 4 percent year-on-year in November of 2022, easing from an upwardly revised 4.5 percent contraction in the previous month. It was the seventh consecutive monthly contraction in the Russian economy, pressured by weaker domestic demand due to sweeping Western sanctions in retaliation to Moscow’s invasion of Ukraine. In its latest policy decisions, the Central Bank of Russia also cited labor shortages due to the military mobilization as constraints to the growth of the Russian economy. Considering the January-November of 2022, the economy decreased by 2.1% compared to the same period of the previous year
The economy contracted by 2.1%, according to the country's statistics agency, but this was less than an earlier prediction of a 12% fall.
While questions have been raised about the reliability of the data, many commentators have been surprised at the Russian economy's resilience.High oil prices and military spending have helped to support the economy.After the invasion, hundreds of Western firms
withdrew from Russia. The initial shock forced the stock market in Russia to close temporarily and saw the rouble tumble as people queued up at cash machines.
The Institute for International Finance had predicted the Russian economy would shrink by 15% in 2022 and last March, US President Joe Biden said it was "on track to be cut in half".
However, for most of 2022, Russia was able to continue exporting energy.
Western limits to energy exports were only applied gradually during the year, and while imports to Europe fell sharply during the year, a steady stream of buyers in China, India and elsewhere stepped in to buy up the oil which Europe would not.