UPDATE 1-Putin: Russian economy likely to contract 2.5% in 2022, but beats expectations

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17 Jan. (Reuters) – President Vladimir Putin said on Tuesday that Russia’s economy was likely to have contracted by 2.5% by 2022, but that it performed better than most experts had predicted.

Putin, speaking at a meeting with top officials including the finance minister and the central bank chief, said real wage growth should be stimulated.

“The actual dynamics turned out to be better than many expert forecasts. According to the Ministry of Economic Development, Russia’s GDP fell in January-November 2022, but only by 2.1%,” Putin said.

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“Some experts in our country, not to mention foreign ones, predicted a decline of 10% and 15% or even 20%. A decline of 2.5% is expected for the whole year,” he added.

The war in Ukraine and the ensuing barrage of Western sanctions has upended some sectors of the Russian economy, cutting off the largest banks from SWIFT’s financial network, limiting access to technology and reducing the ability to extract oil and to export gas is limited.

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While the government and central bank acknowledge the difficulties, Moscow says the economy is resilient and sanctions against the West have boomeranged, driving up inflation and energy prices. (Reporting by Reuters; editing by Kevin Liffey)

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