Russia GDP Contracts in Q1

2026-05-15 16:18 By Andre Joaquim 1 min. read

Russia’s economy contracted by 0.2% year-on-year in the first quarter of 2026, marking its first annual decline in three years and reversing from a 1% expansion in the previous quarter.

The data came just days after the Russian government downgraded its full-year GDP growth forecast to 0.4% from an earlier estimate of 1.3%.

The downturn occurred despite a sharp rise in the prices of key Russian exports, including oil, natural gas, coal, industrial metals, and grains, following disruptions to Middle Eastern shipping routes caused by the war.

Economic activity also weakened even as the Duma ramped up deficit spending in an effort to support an economy still constrained by Western sanctions, which continue to isolate Russian producers and financial institutions from international markets. Meanwhile, Russia’s energy revenues fell by 40% year-on-year in the 12 months through April, while interest rates set by the Bank of Russia are expected to remain elevated.



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Russia GDP Contracts in Q1
Russia’s economy contracted by 0.2% year-on-year in the first quarter of 2026, marking its first annual decline in three years and reversing from a 1% expansion in the previous quarter. The data came just days after the Russian government downgraded its full-year GDP growth forecast to 0.4% from an earlier estimate of 1.3%. The downturn occurred despite a sharp rise in the prices of key Russian exports, including oil, natural gas, coal, industrial metals, and grains, following disruptions to Middle Eastern shipping routes caused by the war. Economic activity also weakened even as the Duma ramped up deficit spending in an effort to support an economy still constrained by Western sanctions, which continue to isolate Russian producers and financial institutions from international markets. Meanwhile, Russia’s energy revenues fell by 40% year-on-year in the 12 months through April, while interest rates set by the Bank of Russia are expected to remain elevated.
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