Russia's economy plunges 4.7% year-on-year in October

Russia's economy plunges 4.7% year-on-year in Oct after 3% drop in Sept

Economic contraction was mostly driven by a drop in output in the manufacturing and agriculture sectors

 Representative image. Credit: iStock Photo

Russia's gross domestic product fell 4.7 per cent year-on-year in October, after a 3 per cent decline in September, the economy ministry said on Friday.

Economic contraction was mostly driven by a drop in output in the manufacturing and agriculture sectors, the ministry said, putting the January-October GDP contraction at 3.6 per cent.

The ministry revised September's GDP contraction figure from the 3.3 per cent reported a month ago.

The Russian economy took a hit from a global drop in prices for oil, its key export, and the Covid-19 pandemic, while also feeling the burden of Russia-specific geopolitical risks and fears of more sanctions against Moscow.

"With virus restrictions tightening in many regions, the roll-out of the vaccine pushed back, and fiscal support unlikely to be stepped up, the economy will struggle to gain momentum over the coming months," Capital Economics said in a note.

President Vladimir Putin said on Friday the economy was on track to fall 3.9 per cent this year, which is more optimistic than the central bank's forecast of an economic contraction of up to 5 per cent.