The country’s GDP declined by 3% in April 2022, even though in March it rose by 1.3%, in February it increased by 4.1% and in January the ministry reported about 5.6% growth of the GDP, the Interfax-Kazakhstan reported, citing the Russian Ministry of Economic Development.
Over the period from January to April 2022, the average growth of the Russian GDP was 1.7% compared to last year’s figures.
Among key drivers of the decline, the ministry says, are international restrictions in the sphere of transportation and logistics as well as domestic demand shrinking.
In terms of the main industries in Russia, wholesale trade and cargo transportation showed the most serious plunge. In April, they dropped by 11.9% and 5.9% respectively, although in March the wholesale trade dropped just 0.3% while the cargo transportation industry rose by 3.6%.
The volume of industrial production in the country decreased by 1.6% in April (in March it rose by 3%).
Russian commodity sectors also showed quite a serious plunge in performance (1.6%, although it showed 7.8% growth in March). The processing industry dropped just by 2.1% (the decline in March was 0.3%).
Another huge driver of the GDP decline is consumer demand. It has been constantly shrinking since the beginning of April. According to the ministry, the total turnover in the retail, food industry and paid services sector declined by 6.7% in April (it grew by 3.3% in March).
The Bank of Russia, a monetary regulator in the country is forecasting that the Russian GDP may drop by 8-10% this year. The Ministry of Economic Development says that the country’s economy may decline by 7.8% or 8.8% depending on the type of scenario.
The ministry is expecting that this free-fall will stop in the third quarter and will gradually start to grow in the fourth quarter.
In turn, analysis from the European Bank for Reconstruction and Development shows that the Russian GDP is going to decline by 10% this year with zero growth next year.
