Russia’s economy grew at a pace of just 1.6% in the first quarter of the year in because of the coronavirus pandemic and the slump in global oil prices it has brought about. With such a high percentage of shops and malls closed and millions around the world working from home, demand for gasoline plummeted. This sent prices for crude oil into negative territory, which has hit revenues on one of Russia’s primary income streams hard.
The data for the second quarter “will be much worse and, with the virus outbreak not under control and fiscal support limited, the risk of a more sluggish economic recovery than we anticipate is rising,” wrote the Capital Economics research firm.
Before the coronavirus pandemic, economic growth in Russia was expected to pick up in 2020 thanks to the state spending program of the new government, but the data did not capture the lockdowns that Russia was forced to impose at the end of March.
