Russia's economy contracts more slowly in June

MOSCOW (Reuters) - Russia's economy was 6.4% smaller in June than a year earlier, data showed on Friday, following a sharper contraction -- revised to 10.7% -- in May, when the country was partially locked-down to combat the spread of the novel coronavirus. In the second quarter, when health restrictions ravaged economic activity, the Russian economy shrank by 9.6% year-on-year after growing 1.6% in January-March compared with the first quarter of 2019, the economy ministry said. It previously forecast that gross domestic product (GDP) would fall 9.5% in the second quarter

Reuters July 18, 2020 00:05:16 IST
Russia's economy contracts more slowly in June

Russias economy contracts more slowly in June

MOSCOW (Reuters) - Russia's economy was 6.4% smaller in June than a year earlier, data showed on Friday, following a sharper contraction -- revised to 10.7% -- in May, when the country was partially locked-down to combat the spread of the novel coronavirus.

In the second quarter, when health restrictions ravaged economic activity, the Russian economy shrank by 9.6% year-on-year after growing 1.6% in January-March compared with the first quarter of 2019, the economy ministry said.

It previously forecast that gross domestic product (GDP) would fall 9.5% in the second quarter.

"The main factor for recovering economic activity in June was the continuing removal of quarantine restrictions, which had the most positive effect on the market," Polina Kryuchkova, deputy economy ministry, said in the statement.

The ministry did not give a GDP figure for the first six months of 2020.

Russia's economy is on track to shrink by 5% in the whole of 2020, the economy ministry has forecast. The central bank range for the fall is 4-6%.

According to the state statistics service, Rosstat, Russia's industrial output fell 9.4% in June compared with a year ago.

The Russian central bank has signalled its readiness to cut its key rate, now at 4.5%, for the fourth time this year at its rate-setting meeting next Friday.

(Reporting by Darya Korsunskaya and Polina Devitt; writing by Alexander Marrow and Polina Devitt; Editing by Catherine Evans and Toby Chopra)

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