Russia’s economy contracted by 8.5% in the second quarter of 2020 compared to the same period last year, according to the state statistics agency. The Rosstat agency said in a statement that GDP fell in all areas of the economy except agriculture between April and June, with passenger transport down 79% and the services industry down 37.2%. The sharp drop came after 1.6% growth in the first quarter. Russian authorities had hoped to see an economic revival supported by massive state projects to modernize infrastructure this year, but these plans were ruined by the oil crisis that began in March. Russia and Saudi Arabia launched a price war that was extremely damaging to Russia’s economy, which is highly dependent on exports of oil and gas. Shortly after the oil crisis, the pandemic hit Russia and the country imposed strict lockdown measures from the end of March until early May.
