Rosstat estimated the decline in Russia’s GDP in Q1 23 at 1.9%

(This footage was produced in Russia where regulations restrict coverage of a Russian military special operation in Ukraine)

MOSCOW, May 17 (Reuters) – Russia’s gross domestic product decline in the first quarter of 2023 slowed to 1.9% on an annualized basis, Rosstat’s flash estimate showed on Wednesday.

In the fourth quarter of 2022, according to the statistical service, the Russian economy declined by 2.7% year-on-year, while in the first quarter of last year it grew by 3%.

The Central Bank had previously estimated a decline in Russia’s GDP in the first quarter of this year. at 2.3%, the Ministry of Economic Development at 2.2%.

The decrease in GDP in the period January-March was supported by a decrease in wholesale trade turnover – by 10.8%, water supply, sanitation, organization of waste collection and disposal – by 10.2%, decrease in retail trade turnover – by 7.3%, mining – by 3.3%, and trade in goods – by 2.1%.

At the same time, an increase was recorded in manufacturing – by 1.1%, agriculture – by 2.9%, construction – by 8.8% and passenger traffic – by 15.7%.

The impact of Western sanctions on the economy is mitigated by the activation of the military-industrial complex and large government spending against the backdrop of the Russian Federation’s “special military operation” in Ukraine. The increase in industrial production is mainly due to industries that are one way or another related to the state defense order.

In April, the Ministry of Economy improved its expectations regarding the dynamics of the Russian economy for 2023, expecting a GDP growth of 1.2%. The head of the department called this assessment “conservative”.

The Central Bank forecasts GDP growth in the range of 0.5% to 2%.

At the end of 2022, when Moscow launched a “special operation” in Ukraine, the Russian economy shrank by 2.1%, according to Rosstat, after growing by 5.6% in 2021. Before the “special operation”, the Russian government counted on a GDP growth of 3.0% in 2022-2023. (Daria Korsunskaya; editor Anton Kolodyazhny)


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