Russian economy shrinks 0.4% in H1 but capital investment rises
2022.08.31 19:18
FILE PHOTO: A pedestrian walks past the windows of business premises put out for rent in Moscow, Russia June 8, 2022. REUTERS/Evgenia Novozhenina
MOSCOW (Reuters) – The Russian economy shrank 0.4% in the first six months of 2022 compared with a year ago but capital investment, one of the main economic growth drivers, rose 7.8%, data from the federal statistics service Rosstat showed on Wednesday.
The export-dependent economy is plunging into recession, hit by sweeping Western sanctions for what Moscow calls “a special military operation” in Ukraine. But the depth of contraction has so far been not as big as initially thought.
In 2022, the economy will shrink by less than 3%, a top government official said this week. His call contrasts with the earlier assumption from the economy ministry that had warned of a drop of more than 12% – which would have been the biggest fall in economic output since the mid-1990s crisis following the collapse of the Soviet Union.
In the second quarter alone, capital investment rose by 4.1% year-on-year after a 12.8% increase in the first quarter, Rosstat data showed, with mining and manufacturing sectors accounting for the bulk of the increase in the first half of the year.
