MOSCOW: Russia's economy shrank by 3% in 2020, its sharpest decline in 11 years as the global COVID-19 pandemic took its toll, revised official data showed on Thursday.

The figures from the Federal Statistics Service Rosstat were marginally better than Rosstat's preliminary estimate that gross domestic product fell by 3.1% last year.

The coronavirus outbreak paralysed business activity in 2020, prompting the central bank to slash interest rates to a record low 4.25%, while a drop in global oil prices dented Russia's revenues.

Russia held up better than some other countries hit hard by the pandemic, including Germany and Britain, which saw their economies shrink by 5% and 9.9% respectively last year, but it lagged China's economy, which grew 2.3%.

In the fourth quarter, Russia's economy contracted 1.8% year-on-year, compared with a revised 3.5% decline in the previous quarter, Rosstat said on Thursday.

A decline in global energy demand, particularly in the early months of the pandemic, hit Russia's economy hard, but service sector enterprises suffered the most last year, it said.

The hotel and restaurant industry contracted 24.5% over the year, while cultural and sports institutions, transport and tourism also sustained heavy blows.

The financial and insurance sector, however, saw growth of 7.3% as demand for banking services, including support programmes for households and preferential mortgages, increased.

In 2021, the Russian economy is expected to recover, with the central bank predicting it will rebound to pre-crisis levels by the end of the year.

The World Bank said on Wednesday that Russia's economy was on track to grow by 2.9% in 2021, assuming there is no third wave of coronavirus infections. The country has reported 99,233 deaths from COVID-19 so far.