Russia’s economy contracts 7.9% in 2009

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The Federal Statistics Service has today announced Russia’s economy contracted 7.9% in 2009.

While the figures were not as bad as the Government’s estimate of 8.5%, it was still the largest annual fall in 15 years.

The Russian economy, which is heavily reliant on oil exports, has suffered from a severe downturn but it appears that the economy is on the road to recovery as a result of the rebound in oil prices.

Furthermore, economists are upbeat about the economy, the International Monetary Fund is predicting Russia’s GDP will expand by 3.6% in 2010, while the World Bank is forecasting 3.2% growth.

In addition, international ratings agency Fitch has upgraded its assessment of Russia’s economy outlook from “negative” to “stable.”

In related news, manufacturing data suggested a month of expansion in January. The purchasing managers’ index grew to 50.8 from December’s level of 48.8. Any reading above the crucial 50 mark represents growth.

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