07:26 PM EDT, 08/12/2026 (MT Newswires) -- Russia's economy grew 1.3% in Q2 after contracting 0.2% in Q1, with growth exceeding the economy ministry's 0.9% forecast, AFP reported Wednesday.

Growth was driven by stable domestic demand despite Ukrainian drone strikes targeting Russian refineries and warehouses of online retailer Wildberries, AFP reported, citing the ministry.

The Russian economy continues to face high borrowing costs, labor shortages and inflation, while the central bank recently cut its full-year GDP growth forecast to 0%-1% from 0.4%-1.3%, AFP reported.