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Russian says recession over but economic pain goes on

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Moscow: Russia’s economy minister today said the country has edged out of recession but the crisis-hit economy remains mired deep in trouble.

“According to formal indicators the recession in the Russian economy has finished,” minister Alexei Ulyukaev was quoted as saying by RIA Novosti news agency.

A recession is usually defined as at least two consecutive quarters of negative growth.

An end to Russia’s recession would imply an increase in GDP in the third quarter over the second, but Ulyukaev offered no quarter-on-quarter figures.

Ulyukaev, however, repeated that the overall drop in the economy in 2015 could be as much as 3.9 per cent as Russia continues to suffer from the impact of lower oil prices and Western sanctions over Ukraine.

Russia’s economy has been in recession since the third quarter last year, according to official figures, with inflation rising and the ruble crumbling.

Russia’s economy shrank 4.1 percent year-on-year in the third quarter of 2015 compared to a drop of 4.6 in the second quarter, official statistics showed earlier this month.

The government assertion that the economic crisis has bottomed out matches with official predictions that there will be a slight recovery of 0.7 percent in 2016.

The World Bank, however, in September ditched an earlier forecast of a gentle recovery with 0.7 percent growth in 2016.

It now expects Russian economic output to decline 0.6 percent next year, with a recovery only appearing in 2017 with growth of 1.5 percent.

As Russia has been roiled by its economic crisis the poverty rate has climbed to 15.1 percent, representing 21.7 million people, according to the World Bank.

In some regions, more than 35 percent of the population live in poverty, it said.

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