Russian economy shrank 4.6 percent in Q2 on lower oil prices

It also exceeded the Russian Economy Ministry’s forecast of 4.4% economic decline this year.

“We had an outflow of deposits at the end of [last] year, the beginning of this year”.

She said that while all parts of the Russian economy struggled in the second quarter, it was the deterioration in industry that hurt the most.

Saveleva proposes that instead of destroying the sanctioned foodstuffs, the products could be handed over to the needy or sent to residents in Eastern Ukraine, where thousands have been killed in fighting between government forces and Russia-backed insurgents in the past year.

Following the ruble’s swift depreciation over the past four weeks, the Kremlin and the central bank have stepped in with verbal interventions, in what appeared to be an attempt to limit the ruble’s slide.

But the combination of a fall in the oil price and lower interest rates has renewed pressure on the rouble, which has tumbled by more than 40 per cent against the US dollar in the past 12 months, making it the worst performer globally. “The central bank may have to pause the monetary policy easing cycle at a time when local banks are still cut off from external sources of funding”. But the central bank said the actual repayments were only up to $US35 billion. “I see how persistent you are in going down that path”. It’s in light of those memories compared to the freedoms of the capitalist market of modern Russian Federation where shelves are packed and lines are short, that is enraging many Russians.

The first estimate of gross domestic product, made public Monday by the statistics service Rosstat, reflects the seriousness of the economic crisis, which the country is going through due to the plunge in oil prices – the country’s first source of income – and sanctions related to the Ukrainian crisis. “Sharp swings in the ruble rate have hit consumer demand and capital investment”.

Information for this article was contributed by Anna Andrianova, Zoya Shilova, Olga Tanas and Vladimir Kuznetsov of Bloomberg News and The Associated Press.