Watch CBS News

Russia's economy is officially in recession

Price controls coming back
Russia's war, inflation prompt major economies to bring back price controls 04:22

Nine months after Russia invaded Ukraine, its economy has entered a recession, according to government statistics released this week.

The nation's output has shrunk for two consecutive quarters, according to Rosstat, the government statistical agency.

In the July-September period, Russian economic output fell 4% from the corresponding period the year before, Rosstat announced. Wholesale, retail, shipping and manufacturing activity fell during that period, while construction and agriculture grew, the government said. 

The drop follows a 4.1% decline in the April-June period, led by drops in trade, shipping, waste disposal, restaurant and hotel activity. 

A recession is commonly defined as two back-to-back quarters of shrinking GDP, although, in the U.S., recessions are officially called by a panel of economists who take multiple factors into account.

Russia launches new missile barrage against Ukraine 02:44

Economic toll avoided up until now

To date, Russia has managed to avoid the worst economic effects from its war in Ukraine. Despite Western sanctions and corporate flight, the surging price of oil and gas, as well as capital controls imposed by the government, has kept Russia solvent and boosted the ruble

Still, there has been a marked economic decline since September, when Russian President Vladimir Putin mobilized troops for the war. Research from the Bank of Russia noted that the nation's economy got noticeably worse in September, "with early signs of some deterioration emerging by the end of the month" as supply and demand both dropped and inflation rose.

Bank of Russia Chair Elvira Nabiullina warned lawmakers earlier this week that the economic picture could worsen. 

"We really need to look at the situation very soberly, with open eyes," she told Russia's lower house, known as the Duma, according to news agency Interfax.

Nabiullina told officials to "be ready for any development."

"Yes, the situation can worsen, we understand this," she said, calling for a "restructuring" of the economy.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.