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plummeted in recent months. AEB estimates that sales fell by as much as 84% year-on-year in May.
Industrial production has also started to decline. It contracted by 2% year-on-year in April. Extractive production was particularly affected by declining export demand for Russian oil. Oil refining decreased by 10% year-on-year.
Developments in the processing industry have been very mixed. Problems have been caused in particular by component shortages. Imports of components into Russia have become significantly more difficult due to EU and US sanctions and the own decisions of foreign companies. Production in the automotive industry contracted by more than 60% year-on-year in April. The manufacture of other transport equipment and electrical equipment also decreased by almost 10%. In contrast, in some industries, such as the pharmaceutical industry, production grew rapidly.
The transport sector has also suffered from the effects of war and sanctions. The total volume of transports decreased by 6% year-on-year in April. Air transport decreased by as much as 85%. Many countries have closed their airspace to Russian planes. In addition, the EU and the United States have banned the export of aviation products and services to Russia.
Economic development was still supported in April by construction and agriculture. Construction grew by 8% year-on-year in April, driven by rapid growth in housing construction. Agricultural production increased by 3%.
Russia's economic development is expected to weaken further in the coming months. According to the latest forecasts, Russia's GDP is expected to contract by 8-15% this year. According to most forecasts, GDP is not expected to grow until next year.
72 RUSSIA Country Report October 2020 www.intellinews.com