FX.co ★ Russia GDP Contracts for 1st Time in 3 Years

Russia’s GDP shrank by 0.2% year-on-year in the first quarter of 2026, matching the preliminary estimate and marking the first annual decline since the first quarter of 2023. Output fell in several key sectors, including manufacturing (-1.5%), professional, scientific, and technical activities (-6.1%), and transportation and storage (-1.8%).

The figures are consistent with the government’s decision to cut its full-year GDP forecast to 0.4%, down from a previous projection of 1.3%. The downturn came despite a sharp increase in prices for major Russian exports—such as oil, natural gas, coal, industrial metals, and grains—following war-related disruptions to shipping routes in the Middle East. Economic activity weakened even as the Duma increased deficit spending in an attempt to bolster an economy still constrained by Western sanctions, which continue to limit Russian producers’ and financial institutions’ access to international markets.