Kremlin Moves to Restore Growth After Russian Economy Faces Recent Contraction
Russian Economic Performance and Government Response
Recent Economic Contraction and Official Statements
MOSCOW, April 30 (Reuters) - Russian President Vladimir Putin and the government are working to restore growth, the Kremlin said, after preliminary official data showed the $3.0 trillion economy contracted for the first time in three years and the central bank called for honest data.
Russia's economy, which contracted in 2022 but grew in 2023, 2024 and 2025, has outperformed most expectations and avoided a crash which Western powers had hoped to stoke by piling on the most onerous sanctions ever imposed on a major economy.
First Quarter 2025: Contraction Details
But just weeks after Putin announced a contraction in the first two months of 2025, the Economy Ministry said the overall figures for the first quarter of this year would be a contraction of 0.3%, less than many economists feared.
"This is an expected process," Kremlin spokesman Dmitry Peskov told reporters on Thursday when asked about the economic data by Reuters. "The expected cooling-down process of the economy has taken place."
Government Measures to Counter Negative Trends
"The government and the president are taking measures and developing solutions aimed at changing this negative trend into an upward trend," Peskov said.
Factors Influencing Economic Performance
Growth and Contraction in Recent Years
Russia's economy shrank by 1.4% in 2022, but expanded by 4.1% in 2023 and 4.9% in 2024. It grew only 1% last year and Moscow's official forecast for this year is 1.3%.
Central Bank Analysis and External Factors
After a rate-setting meeting last week, the central bank said that the decline this year was largely driven by one-off factors such as a hike in value-added tax at the start of the year and heavy snowfall that slowed construction.
Other Contributing Factors
Other Russian officials and business leaders blamed labour shortages and slow implementation of new technologies as well as the strong rouble for the contraction, which appeared to come as a surprise for the Kremlin.
Data Transparency and Official Confidence
Calls for Honest Economic Data
Russian central bank governor Elvira Nabiullina called for honesty in economic data on Tuesday, after Western intelligence agencies made allegations about the quality of Russian data and hinted at manipulation by the authorities.
Kremlin's Confidence in Economic Statistics
Asked if the Kremlin had confidence in the published economic statistics, Peskov said: "Absolutely".
(Reporting by Dmitry Antonov, Writing by Anna Peverieri and Guy Faulconbridge; editing by Mark Trevelyan)
