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August 25, 2009

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Home » Business » Economy

Russia likely emerging from deep recession

RUSSIA is likely emerging from its deep recession, a top governmental official said yesterday, noting an improvement in the latest economic output figures for July.

Gross domestic product rose 0.5 percent in July from the previous month and was down 9.3 percent from the same month in 2008, said Deputy Economic Minister Andrei Klepach. The yearly rate is a smaller fall than the 10.1 percent drop in June and 11.5 percent in May.

"We can say with a degree of certainty that the recession is generally over, and the economy is moving to recover," Klepach said, according to the state news agency RIA Novosti.

Klepach also pointed to the fact that industrial output in Russia has been growing monthly since May, but warned that growth statistics could be slowed by a seasonal correction, the halt of production at Russia's largest car maker AvtoVAZ and the deadly accident at Russia's largest power plant.

Russia is weathering its biggest recession in a decade. Its economy has already shrank by more than 10 percent this year and the government is running a 7.5 percent budget deficit - its first in a decade. It has been the hardest hit of the major developing economies as oil prices plunged from last year and demand for metals dropped off.

President Dmitry Medvedev has said Russia has suffered more than expected due to its over-dependence on oil exports. He warned Russia's economy will have "no future" unless it diversifies.


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