Monday, October 12, 2009

Russian economy sink more than forecast

       Russian President Dmitry Medvedev said yesterday that Russia's economy was hit harder than expected by the global financial crisis, but Kremlin measures helped the country avoid the worst-case scenario.
       Russia's gross domestic product will drop by about 7.5% this year, compared with earlier forecasts of 3% to 3.5%, and industrial production fell by nearly 14%in the first half of 2009, Mr Medvedev said.
       "I must admit that we sunk below our lowest expectations," Mr Medvedev told the state-owned Channel One network in an interview that aired yesterday."The real damage to our economy was far greater that anything predicted by ourselves, the World Bank and other expert organisations."
       Russia is facing its first recession in a decade, with gross domestic product down by an annual 10.9% in the second quarter of the year. The recession followed a crash in commodity prices, flagging foreign investment and a squeeze on credit markets.
       Mr Medvedev said that Russia faces a significant budget deficit next year that will surpass the September figure of almost 5% of GDP."But it's not a tragedy,not a disaster for the economy," he said.

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