Russia's economy shrinks by 3.1 per cent in the pandemic year

Russia on Monday said that its economy contracted by 3.1 per cent in 2020 it was hit by coronavirus lockdowns and decrease in global crude oil prices. The contraction was less severe than Russian central bank's forecast of about 4 per cent. The Rosstat statistics agency attributed the drop to "restrictions imposed to combat the coronavirus and the fall in global demand for energy resources".

The 3.1 per cent drop, a first estimate, was also a relatively good result compared with many European countries that reintroduced lockdowns when a second wave of infections surged late last year. 

Spain saw an 11 per cent drop, France 8.3 per cent and Germany 5.0 per cent.

Rosstat said the Russian economy's largest losses were recorded in the hospitality, transport, culture and sport sectors. Rosstat didn't publish quarterly figures but the economy is expected to have rebounded by 7.4 per cent last three months of the year following a steep drop from April through September.

Before the pandemic hit Russia in March, its economy had grown by 1.6 per cent in the first quarter from the same period in 2019.

President Vladimir Putin had hoped 2020 would present an opportunity to revive a stagnating economy that for years has been bruised by Western sanctions.

But oil prices plunged sharply in early March, slashing Russia's energy revenues.

On Monday, Russia's coronavirus caseload stood at more than 3.8 million, the fourth-highest worldwide.