Cyprus Mail

Russia’s economy contracted 4.2% in H1 2020

Vladimir Putin

Russia’s gross domestic product (GDP) declined 4.2 per cent in the first half of 2020, Economy Minister Maxim Reshetnikov was quoted as saying by the Interfax news agency on Wednesday.

Reshetnikov said his ministry was maintaining its full-year forecast of a decline in GDP of 4.8 per cent in 2020, but that it would revise this forecast in August.

The announcement comes at a time when Russia reported 5,862 new cases of the novel coronavirus on Wednesday, pushing its total infection tally to 789,190, the fourth largest in the world.

The country’s coronavirus crisis response centre said 165 people had died in the last 24 hours, bringing the official death toll to 12,745.

Russia has dropped its target of becoming one of the world’s five largest economies in a sweeping reset of its ambitious national development goals, the Moscow Times reported on Wednesday.

The goal was outlined by President Vladimir Putin following his reelection in 2018, but has been left out of Russia’s new social and economic targets announced on Tuesday.

Putin also delayed a number of other goals to 2030 from the original 2024 deadline, including halving Russia’s poverty rate and boosting life expectancy to 78.

Kremlin spokesman Dmitry Peskov said “highly, highly unfavorable” global economic conditions were behind Russia dropping the goal to become one of the world’s top 5 economies.

Measured in terms of purchasing power parity (PPP) — an indicator which accounts for differences in living standards — Russia was the sixth largest economy in the world in 2019, the World Bank estimates. In nominal terms, Russia ranks eleventh.

Russia’s economy is expected to recover from the coronavirus pandemic slower than most other countries, a host of economic forecasts predict.

Peskov told journalists that goals on raising life expectancy and reducing poverty had been pushed back due to the unfavourable world economic conditions that will slow the development of all countries without exception.

18 million Russians currently live below the poverty line.

Life expectancy has grown in recent years from extremely low levels in the early post-Soviet years, especially among men. In 2019, it was 67 for men and 77 for women.

This year Russia has seen its economy, dependent on exports of hydrocarbons, hit by a collapse in oil prices as well as the coronavirus pandemic.

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