The Economy Ministry said GDP shrank 0.5 per cent last month, the first drop since October 2009. Analysts said the contraction is likely to worsen.
Oil prices are down almost 50 per cent from a peak in June, continuing to fall this month after the exporters’ group OPEC refused to cut output. Sanctions imposed over Moscow’s role in the Ukraine have deterred foreign investment and led to over $100bn (£64bn) leaving Russia this year.
“With the current oil price we expect things to get worse. There is no cause for optimism,” said Dmitry Polevoy, chief economist for Russia and CIS at ING Bank in Moscow.