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Russia’s economy contracted at the fastest pace in six years in 2015, as plunging oil prices and sanctions over aggression in Ukraine took their toll.
The country’s GDP dropped by 3.7pc last year, according to state-run statistics agency Rosstat, after the Russian economy eked out growth of just 0.7pc in 2014. Analysts had expected a fall of 3.8pc.
Vladimir Putin, Russia’s president, last month claimed that the economic crisis had peaked. However, analysts said that the embattled country was nonetheless likely to remain in recession. William Jackson, of Capital Economics, said that “the economy is still extremely weak”.
Fixed investment fell by 8.7pc year-on-year in December, after a fall of 4.7pc in November. Retail sales also shrank by 15.3pc year-on-year, after a drop of 13.1pc in the preceeding month.
The data were much weaker than most analysts had anticipated," said Mr Jackson, adding that Russian economic "activity weakened markedly towards the end of the quarter".
Russia, the world’s largest energy exporter, has been battered by the falling price of oil. The cost of a barrel of Brent crude, a benchmark for the oil price, has tumbled from a peak of $115 in the summer of 2014 to under $28 on Monday.
Sanctions imposed over Mr Putin's annexation of Ukraine's Crimea region in 2014 have also hit the Russian economy.
“The latest fall in oil prices and drop in the rouble mean the likelihood of a second consecutive year of recession is rising.” If the economy were to remain in contraction for two years, it would mark the lengthiest Russian economic decline since the 1990s.
Mr Putin has said that Russia’s 2016 budget had been calculated on the assumption that a barrel of Brent would fetch $50. This figure appeared “optimistic”, he admitted last month.
The Russian currency has sunk in tandem with the cost of crude, as the economy is dependent on oil for revenues. It hit an all-time low last week, with one US dollar fetching more than 85 roubles at its weakest point.
The rouble has been the world’s second worst-performing emerging market currency in the past three months, only outperforming Argentina’s peso in the period, according to Bloomberg.
The country’s GDP dropped by 3.7pc last year, according to state-run statistics agency Rosstat, after the Russian economy eked out growth of just 0.7pc in 2014. Analysts had expected a fall of 3.8pc.
Vladimir Putin, Russia’s president, last month claimed that the economic crisis had peaked. However, analysts said that the embattled country was nonetheless likely to remain in recession. William Jackson, of Capital Economics, said that “the economy is still extremely weak”.
Fixed investment fell by 8.7pc year-on-year in December, after a fall of 4.7pc in November. Retail sales also shrank by 15.3pc year-on-year, after a drop of 13.1pc in the preceeding month.
The data were much weaker than most analysts had anticipated," said Mr Jackson, adding that Russian economic "activity weakened markedly towards the end of the quarter".
Russia, the world’s largest energy exporter, has been battered by the falling price of oil. The cost of a barrel of Brent crude, a benchmark for the oil price, has tumbled from a peak of $115 in the summer of 2014 to under $28 on Monday.
Sanctions imposed over Mr Putin's annexation of Ukraine's Crimea region in 2014 have also hit the Russian economy.
“The latest fall in oil prices and drop in the rouble mean the likelihood of a second consecutive year of recession is rising.” If the economy were to remain in contraction for two years, it would mark the lengthiest Russian economic decline since the 1990s.
Mr Putin has said that Russia’s 2016 budget had been calculated on the assumption that a barrel of Brent would fetch $50. This figure appeared “optimistic”, he admitted last month.
The Russian currency has sunk in tandem with the cost of crude, as the economy is dependent on oil for revenues. It hit an all-time low last week, with one US dollar fetching more than 85 roubles at its weakest point.
The rouble has been the world’s second worst-performing emerging market currency in the past three months, only outperforming Argentina’s peso in the period, according to Bloomberg.
