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Russian economy contracts 3.6% year-on-year in third quarter

People walk along the street as the government eases restrictions imposed to curb the spread of the coronavirus disease (COVID-19) in Moscow, Russia June 16, 2020. REUTERS/Evgenia Novozhenina/Files

MOSCOW (Reuters) - Russia’s economy contracted 3.6% year-on-year in the third quarter, preliminary data showed on Thursday, as the coronavirus pandemic and lower prices for oil, Russia key export, took their toll.

In the second quarter, Russia’s gross domestic product shrank by 8% in year-on-year terms after growing 1.6% in the first three months of 2020.

Analysts polled by Reuters had on average expected Russia’s GDP to contract by 4.5% in July-September.

The central bank, which slashed its key interest rate to a record low of 4.25% in an attempt to mitigate an economic contraction, expects GDP to fall 4-5% this year.

The economy ministry hopes the economy will contract by no more than 3.9% in 2020 before returning to growth in 2021.

Reporting by Andrey Ostroukh; Editing by Alex Richardson

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