The Russian economy contracted by 1.9% in the first quarter year-on-year, the statistics service said on Friday, hit by sanctions and falling energy prices, Reuters reported. The reading was broadly in line with estimates given by Prime Minister Dmitry Medvedev and officials from the Economy Ministry over the past month, although some analysts said the figure was better than expected. Russia’s economy has slowed sharply since early last year because of western sanctions over the Ukraine crisis and a sharp slide in global prices for oil, the country’s chief export. However, a recent stabilization of financial conditions, reflected in a rebound of the ruble, has fuelled hopes that the worst of the crisis is over, helped by a partial recovery in oil prices and February’s peace deal in Ukraine. April macroeconomic data due next week, including industrial output, investment and retail sales, will shed light on whether the contraction is accelerating or less severe than expected.
