Russia’s economy contracted by 2.7 percent on an annual basis in the last quarter of 2022, and Rosstat data showed the economy contracted by 2.1 percent in the entire year.
The first quarter of this year was affected by the imposition of a European embargo on Russian oil products, in addition to another embargo on crude oil, and a cap on the price of a barrel of sixty dollars, which weighed heavily on Moscow’s vital oil revenues for its finances.
The European Bank for Reconstruction and Development had indicated, on Tuesday, that the Russian economy will shrink less than expected this year, by 1.5 percent this year, according to updated forecasts.
The bank believes that Russia has benefited from higher than expected oil revenues, thanks to the redirection of its exports to other countries to compensate for its decline in Eastern Europe, and therefore economic growth in Russia is expected to return to 1 percent next year.
For its part, the International Monetary Fund had suggested in a previous report that the Russian economy would be able in 2023, for the second year in a row, to withstand despite the war and sanctions.
The fund said at the time that the Russian economy would grow this year by 0.7 percent, more than the 0.4 percent it expected in its previous report.
Last year, the Fund predicted that Russia’s GDP would contract in 2022 by a sharp contraction of 6 percent, but it contracted by only 2.1 percent.
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