Russia’s economy contracted in April by 12% year on year, data showed on Thursday, recording a sharp fall similar to the one last seen in May 2009, Reuters reported.
Russia’s economic health is in focus after a slump in the price of oil, its key export, and the coronavirus pandemic combined to batter the rouble and prompted the central bank to slash interest rates to prop up the economy.
Economic sectors with the focus on consumer demand staged the sharpest contraction in April, the first full month of coronavirus lockdown in Russia, the economy ministry said late on Thursday.
In the first four months of 2020, gross domestic product shrank by 1.9% in year-on-year terms, the ministry said, revising March GDP growth to 0.8% from 0.9% reported earlier.
In the whole of 2020, Russia’s economy is on track to shrink by 5%, the economy ministry forecasts.
Data showed this week that retail sales fell more than expected in April, while unemployment jumped above forecasts as the coronavirus outbreak gained momentum in Russia, which now has the third-highest number of cases globally.
The Russian central bank has signaled its readiness to sharply cut its key rate, now at 5.5%, next month. Lower rates are designed to support the economy by making lending cheaper and reducing the appeal of bank deposits.
