Despite a pick-up to 2.3% in Q4 2018, real GDP growth slowed down again to 0.63% in the first quarter of 2019 – a record low since Q4 2017. In the face of tightening fiscal policy, private consumption and investment contracted, while export value shrunk on the back of low global oil prices.
Inflation has closed in to the Central Bank’s target of 4%, standing at 4.66% in June 2019. A 25-bp policy rate cut in June and expectations for further loosening of the monetary policy are to put upward pressure on prices in the upcoming months.
Unemployment reached a post-Soviet era low of 4.6% in March and has been sustained at this level since then.
The contamination of the Druzhba oil pipeline depressed Russian exports in May amid rising oil prices, while the economic slowdown of the country’s main trade partners has contributed to a decrease in imports.