Russia's economy shrank for a second quarter as the shock of sanctions over the Kremlin's invasion of Ukraine disrupted trade and upended domestic demand, with the worst of the downturn expected early next year.
Russia's gross domestic product fell at an annual 4% rate in the third quarter, in line with the Russian central bank's estimate but faring better than every forecast in a Bloomberg survey of analysts. The contraction follows a 4% drop in Russia's gross domestic product during the second quarter.
In a statement Wednesday, the Russian statistics service, Rosstat, cited a steep decline in wholesale and retail trade with a drop in industries including manufacturing.
A boost in government spending and Russia's ability to divert exports to friendly nations have helped offset the damage wrought by sanctions, with construction among the few sectors to expand last quarter, thanks partly to a state program of subsidized mortgages.
Expectations for the economy have shifted from a near-collapse soon after Russia's February invasion of Ukraine to a shallower recession expected to extend well beyond 2022.