Jakarta –
Superpower country Russiahe is said to have officially entered the abyss recession. This condition can be seen from the gross domestic product (GDP) which in the third quarter of 2022 fell by 4% on the basis of estimates reported last Wednesday by the national statistics agency Rosstat.
This decrease in GDP is similar to a contraction, i.e. minus 4% in the second quarter, following Western sanctions affecting the Russian economy, The Moscow Times reported on Thursday (11/17/2022). Moscow’s attack on Ukraine. This condition even brings economic instability to the threat of a global recession in 2023.
Western countries, especially the United States (US) and the European Union, have showered Moscow with a barrage of economic and personal sanctions since Putin ordered the deployment of Russian troops to Ukraine on Feb. 24.
From there, export and import restrictions, personnel shortages, and problems with the supply of spare parts eventually weighed on the Russian economy.
After Russia was hit by Western sanctions over its attack on Ukraine, banks sharply raised their benchmark interest rate from 9.5% to 20% in a bid to fight inflation and shore up the ruble.
Then, surprisingly, last October, the Russian central bank kept its main interest rate at 7%. This is the first time since the start of the military offensive against Ukraine that interest rates have remained unchanged.
The economic downturn continued, leading to a contraction. After a 4% contraction this quarter, there was a 22.6% drop in wholesale and 9.1% in retail.
But on the bright side, Russian construction grew by 6.7% and agriculture by 6.2%. Rosstat also noted that the unemployment rate in Russia reached 3.9% last September.
Earlier on Nov. 8, Russia’s central bank had forecast that gross domestic product (GDP) would contract by 3.5% this year. The IMF and the World Bank also forecast Russian GDP to fall by 3.4% and 4.5% respectively.
On the other hand, it should be noted that Russia last experienced a technical recession in late 2020 and early 2021 when the world was experiencing the corona virus pandemic. The Russian economy also did well in early 2022 with a 3.5% increase in GDP.
Watch a video “GDP minus 4 percent, Russia officially withdraws!“
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