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Russian economy returns to growth after pandemic-fueled downturn

Russian economy returns to growth after pandemic-fueled downturn
Russia’s GDP expanded 0.5% in March, data from the Ministry of Economic Development shows. It marks the first monthly growth since the coronavirus pandemic began to affect the Russian economy one year ago.

The GDP rate went into positive territory last month after the year-on-year decline seen in January and February, when the Russian economy shrank 2.2% and 2.5% respectively, according to the official report published on Tuesday evening. The economy was still down in quarterly terms, but the decline in GDP slowed to 1.3% compared to a year ago.

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The performance of the Russian economy in the first three months of 2021 has improved compared to the end of last year. According to statistics agency Rosstat, GDP was down 1.8% in the last quarter of 2020 and decreased 3% for the whole pandemic year.

The economic rebound was supported by continued recovery in manufacturing, freight turnover, as well as the construction sector. Machine-building and chemical industries have become the main drivers of growth, the ministry noted.

READ MORE: Russian stock market shrugs off new US sanctions risks

Earlier this year, both the International Monetary Fund (IMF) and the World Bank raised their outlook for the Russian economy for 2021. The former positively revised its forecast for the second time, now expecting Russia’s GDP to expand 3.8%. The World Bank now forecasts the Russian economy to grow by 2.9% this year.

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