Extreme Weather Hits Russian Agriculture, GDP Growth Slows

Extreme weather conditions in Russia have significantly impacted the agricultural sector, leading to a 14.7% decrease in output in August. This contraction has affected the country's GDP growth rate, which slowed to 2.4% year-on-year for the same month. Other economic sectors remain stable or have shown growth.

Extreme weather conditions have heavily impacted Russian agriculture, leading to a 14.7% decrease in output for August, according to data from the economy ministry released on Wednesday. Issues ranged from early spring frosts to drought and heavy rains, affecting all major grain-producing regions.

Russia's economy ministry noted that the delayed agricultural harvest significantly contributed to the contraction. While the overall GDP grew by 2.4% year-on-year in August, this was a slowdown from the 3.5% growth seen in the previous month. Agriculture has been a key driver of GDP growth in recent years, mostly unaffected by Western sanctions.

Despite an initial forecast of a 132 million metric ton grain harvest for the year, many analysts have revised this downward, with IKAR consultancy estimating a harvest of 124.5 million tons. As of September 1, farmers had harvested 85.2 million tons of grain, 14.7% less than the previous year. Other sectors, including industrial output and manufacturing, showed growth, with Russia expecting a 3.9% GDP growth for the year.

(With inputs from agencies.)