The military component of the Russian economy has contracted for the first time since 2023. This has dealt a blow to Vladimir Putin's pursuit of stable economic growth amid the ongoing war in Ukraine, UNN reports with reference to Bloomberg.
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According to the Russian Federal State Statistics Service, gross domestic product contracted by 0.2% in the first three months of 2026 compared to the same period last year.
This contraction likely indicates that the war-impacted Russian economy is sliding toward a recession under the pressure of elevated borrowing costs, even if certain anomalies may have exacerbated the downturn, the publication states.
Furthermore, heavy snowfall and extreme frosts at the beginning of this year led to a halt in construction—one of the sectors contributing most to Russian GDP growth. During the same period last year, weather conditions were milder, creating more favorable conditions for the industry.
At the same time, the Russian Central Bank stated that the first-quarter contraction does not indicate a general deterioration of the situation, but warned that the March recovery likely reflects only a weakening of negative factors rather than a genuine revival of economic activity.