Eight months after it invaded its sovereign neighbor Ukraine, Russia’s economy has fallen into recession, with its GDP falling by 4% in the third quarter from the same period a year prior, which followed a 4.1% year-on-year decline in its second quarter GDP—in other words, two straight quarterly contractions.
However, Russia’s top central banker, Elvira Nabiullina, said the 3Q downturn was milder than the expected 7% decline. But she added that the country needed to look at its economic situation “very soberly with open eyes” and be prepared for any development, according to the Russian news agency, Interfax.
Nabiullina’s assessment followed months of increasing international sanctions against Moscow over its invasion of Ukraine. International corporations have undertaken a mass exit of Russia, along with a mass emigration of talent. Meanwhile, much of its currency and gold reserves have been frozen.
Russia’s central bank expects the country’s economy to contract by 3% to 3.5% in 2022.