Russia's GDP growth slows in second quarter amid war, economic challenges
Date
8/11/2024 7:58:59 AM
(MENAFN) Russia's economic growth slowed notably in the second quarter of this year, with the GDP expanding by just 4 percent compared to the 5.4 percent growth recorded in the first quarter. This slowdown, reported by the state statistics agency, marks a cooling in the economic rebound from the recession experienced in 2022. The current growth is significantly supported by state-funded production of arms and ammunition, driven by the ongoing conflict in Ukraine.
The Ministry of Economy had initially projected a 4 percent growth rate for the second quarter, which matched the reported figures, while forecasting a 4.7 percent growth for the first half of the year. Despite these predictions, the central bank has revised its annual growth forecast upwards to a range of 3.5 to 4 percent, an improvement from the previous estimate of 2.5 to 3.5 percent. Nevertheless, the central bank has warned that persistent challenges such as labor shortages and limited productive capacity could pose risks of a more severe economic downturn in the future.
The revised growth forecast reflects an ongoing adjustment to the economic realities faced by Russia. While the growth figures indicate a continued recovery, the underlying issues highlight potential vulnerabilities that could impact the stability of the economic rebound. As the country navigates these challenges, the central bank’s caution underscores the complexity of Russia’s economic situation amid ongoing geopolitical tensions and domestic pressures.
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