The economy slowed for the fourth straight year mainly due to a fall in investment (-2 percent), revised data from the Federal Statistics Office confirmed.
In the fourth quarter of 2014, the GDP grew 0.4 percent year-on-year, down from a upwardly revised 0.9 percent expansion in the previous period. Only household consumption contributed positively to the growth (up 1 percent) while government spending, investment and exports shrank 0.2 percent, 1.2 percent and 2.3 percent respectively.
In 2014, sanctions imposed by the United States and the European Union in connection with lower prices of commodities keep dragging foreign investment and exports down. Exports have been on a downward trend since the beginning of 2014 and touched the lowest value in four years in January of 2015.
According to Bank of Russia estimates, the GDP will fall by 3.5-4.0 percent in 2015. Also, the Economy Ministry expects it to shrink by 3 percent. So far, monthly data showed the GDP shrank an annual 1.5 percent in January of 2015 and 2.3 percent in February of 2015.
The central bank already cut the benchmark interest rate twice this year aiming to boost growth. In February, the Finance Minister said the government has allocated 2.3 trillion roubles (USD 37.51 billion) to an anti-crisis plan.