Russia’s Economy Contracts for First Time in Three Years

Russia’s Economy Contracts for First Time in Three Years

RUSSIA: Russia’s economy contracted by around 0.3% in the first quarter of 2026, marking its first quarterly decline since early 2023. The downturn was driven by a combination of factors, including Western sanctions, high interest rates, the ongoing war in Ukraine, and temporary effects such as a VAT increase and severe weather disruptions. Key sectors such as mining, manufacturing and retail showed weakness, while corporate profits fell sharply. Despite the contraction, economic activity rebounded in March, suggesting potential short-term stabilisation. The slowdown has prompted officials to consider additional measures to support growth amid continued structural and geopolitical pressures.

Source: Reuters