Sanctions and Drones Slow Russian Economic Growth

Ukrainian drone attacks on oil infrastructure and Western sanctions are curbing Russian economic growth more than anticipated, according to TsMAKP, a Russian government think-tank. Analysts have cut their GDP growth estimate for the year to 0.5%–0.7%, significantly below projections made just a month ago.

Rising global oil prices, which some experts had expected to benefit Russia following tensions in the Middle East, have failed to offset the impact. Both oil production and exports are set to fall, and the outlook for coming years has been revised downward.

The economy contracted slightly in the first quarter, and President Vladimir Putin has called on the government to identify new sources of growth. The situation has been further complicated by the temporary disruption of supplies through the last remaining oil pipeline to Europe.

(reuters, mja)