The decline in Russia’s GDP slowed down to 1.1% in annual terms

The decline in Russia’s GDP in March slowed to 1.1% in annual terms from 2.9% in February, should from the review of the Ministry of Economic Development “On the current situation in the Russian economy.”

“In annual terms, the decline in GDP slowed to -1.1% after -2.9% in February (-2.7% in January 2023). In general, for the 1st quarter of 2023, the GDP dynamics amounted to -2.2%,” the document says. By February 2023, seasonally adjusted GDP grew by 1% in March after declining by 0.3% a month earlier.

Inflation in March was 3.5%. As of April 24, 2023, annual inflation has slowed to 2.6%, the ministry added. The unemployment rate in March, as in the previous month, was 3.5%. Real cash income and real disposable cash income of the population increased by 0.1% in the first quarter.

The Bank of Russia earlier improved the forecast for inflation and the rate of recovery of the Russian economy in 2023. The regulator now expects GDP growth of 0.5–2%, although back in February it expected a decline. Presidential Aide Maxim Oreshkin, speaking at the educational marathon “Knowledge. First”, estimated economic growth in 2023 at 1-2%.

Following the meeting of the Board of Directors on April 28, the Bank of Russia left the key rate at 7.5% per annum for the fifth time in a row. It has been at this value since September 2022. At the same time, the Central Bank gave a signal to raise the rate at future meetings “in the face of a gradual increase in current inflationary pressure.”