Russia GDP slows to 0.8% amidst sanctions

Growth in the Russian economy slowed to 0.8 per cent in the second quarter of 2014 amidst ongoing political tensions with Ukraine while the country attempts to retaliate trade sanctions imposed by the US and Europe.

The data released today by Russia’s Federal Statistics Service reveals that GDP slipped back to 0.8 per cent between March and June from 0.9 per cent recorded for the previous quarter.

The figure did beat consensus forecasts of 0.7 per cent but fell below the 1.1 per cent estimated by the economy ministry for the quarter.

Signs of a slowing in the economy comes as the US and Europe continue to impose economic sanctions on Russia due to ongoing tensions with the Ukraine.

Russia has recently retaliated against these sanctions by imposing bans on the majority of food imports from both the EU and US.

The central bank of the Russian Federation also brought in a surprise interest rate rise to 8 per cent due to a combination of political tensions and high inflation risks.