Russian Prime Minister Dmitry
Medvedev said Russia's economy shrank by 2% in the first three months of
this year, the first contraction since 2009.
He attributed the
shrinkage to the pressure of sanctions and the weak oil price. But,
addressing MPs, he said the economic situation was not as bad as in 2009
and was stabilising.
He said Russia faced "a new reality".
He said the heaviest pressure had come from "the main political decision last year - the return of Crimea to Russia".
Western
sanctions were imposed after Russia annexed Ukraine's Crimea region in
March 2014, and they have been escalated during the fighting in eastern
Ukraine, where Moscow is backing separatist forces.
He compared
the significance to Russia of the return of Crimea to "the reunification
of Germany or the return to China of Hong Kong and Macao".
Mr Medvedev said sanctions resulting from this were causing significant economic problems.
He
estimated that losses as a result of sanctions had dented income from
some foreign exports by €25bn (£18bn; $26.7bn), 1.5% of gross domestic
product, a figure he said could "increase several times" this year.
Conviction
Last
year, the rouble collapsed in value, causing import prices to shoot up
and exports income to shrink. The situation was heightened by a deep
fall in the price of oil, on which the Russian economy is highly
dependent.
The country's central bank has predicted the economy could shrink by up to 4% this year if oil stays at about $50 a barrel.
But
Mr Medvedev said Russia could cope, even if economic conditions
deteriorated further: "If external pressure intensifies, and oil prices
remain at an extremely low level for a long time, we will have to
develop in a new economic reality.
"I am convinced that we will be
able to live even in such a reality. The experience of the recent
period has shown that we have learnt how to do this."
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