Russian Economy Shows Rapid Growth Amid Recovery From Pandemic, Lockdown

Most nations have been harshly affected by the coronavirus pandemic, paralysing many spheres of the economy due to lockdowns to contain the disease. Yet, some countries and international corporations have already started to rebound, despite the spread of the highly transmissible Delta strain of the virus.

The Russian economy grew 10.3% in the second quarter of 2021 compared to the same time in 2020 – when Russian authorities introduced a lockdown to fight the spread of COVID-19, the Federal State Statistics Service has reported. This is the first time the Russian economy has shown positive growth since the start of the coronavirus pandemic.

The last three quarters showed a drop in the GDP, ranging between 3.5% and 0.7%. The Russian economy took the biggest hit in the second quarter of 2020 with a 7.8% reduction in GDP. Prior to the pandemic, the country's GDP grew by 1.28% on average each quarter.

Now, 12 months later the economic situation has improved drastically, exceeding the consensus estimate of Bloomberg's economic experts of 10%. Unlike many foreign countries, regional authorities in Russia chose not to reinstate lockdowns in 2021 due to the emergence of the Delta strain. Instead, Moscow strongly promoted vaccination as a means to overcome the increase in hospitalisations from COVID-19.

The median forecast by Russian experts suggests that the country's GDP will increase by 4% in 2021 compared to 2020, but some foreign experts suggest the number will be higher. Morgan Stanley revised its estimates citing "positive data surprises" concerning second quarter results and a "more constructive oil price outlook". The investment bank upped the forecasted growth of the Russian economy to 4.6% in 2021 and 3.2% in 2022 taking these new factors into consideration.