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Russian economy slumped 3.7% in 2015

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Staff writer |
Russian economy
Russia   Amid falling oil prices and Western sanctions

Consumer demand and capital investment in Russia declined in 2015, sending the economy into recession, official data showed.

As two of the economy's key drivers fell, Russia's gross domestic product contracted 3.7% amid falling oil prices and Western sanctions, according to data from the Federal Statistics Service, confirming previous estimates.

Retail sales, which reflect the strength of consumer demand, fell 10% last year, while capital investment shrank 8.4%.

Russians' real disposable incomes declined for the second year in a row, falling 4% in 2015 due to inflation that hovered above 15% for several months last year.

In 2016, the oil-dependent economy is likely to contract further, analysts say, as world oil prices have fallen well below $50 a barrel, a level factored in the current version of 2016 budget.

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