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Minister says Russian economy already in recession

An economic recession has begun in Russia, where GDP growth is expected to fall below the 6.8% forecast this year, a deputy economics minister said on Friday, reports Ria Novosti.

 

“A recession has started,” Andrei Klepach said. “We will face two quarters [of economic decline].” A country is commonly accepted to be in a recession when it experiences two consecutive quarters of decline in real GDP.

Klepach did not say how much short of the 6.8% forecast GDP growth would be this year, but he did confirm recent media forecasts that industrial production would only grow 1.9% this year, not the expected 4.7%.

Official statistics put GDP growth at 7.3% for the first nine months of the year, below the Economic Development Ministry's 7.7% estimate. The ministry has predicted GDP growth of 3-3.5% in 2009, in line with World Bank and IMF forecasts.

Russian Prime Minister Vladimir Putin previously said Russia would see GDP growth of 6.8-6.9%, industrial production growth of 4.8%, and 13% inflation for 2008, against a target of 11.8%. (rian.ru)