MOSCOW, Aug. 10 (UPI) — The Russian economy shrank by 4.6 percent in the second quarter this year, posting its worst performance since the 2009 recession.
The Russian ruble also dropped to 64 per U.S. dollar, and inflation went up to 15.6 percent in July, Los Angeles Times reported.
The most damaging influence on the Russian economy was to the slump in oil prices — down to half their value a year ago. Prices are also down 20 percent in just the last six weeks.
Western sanctions against Russia as a result of the Ukraine crisis have also weakended its ailing economy.
The sharp drop in the second quarter came mainly as a result of spending cuts by consumers, Financial Times reported.
In July, AvtoVAZ. one of Russia’s top car manufacturers, stopped production indefinitely. Until this year, Russia was among the top 10 automobile markets in the world, according to the Russian business daily Vedemosti.
Russia’s economy shrank by 2.2 percent in the first quarter of 2015.
On July 31, the Central Bank of Russia cut its key interest rate by 50 basis points. “[The decision took] into account that the balance of risk shifts toward the considerable economy cool despite a slight increase in inflation risk,” CBR said in a statement.
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