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Russia to enter prolonged recession in 2015

Xinhua, February 17, 2015 Adjust font size:

Russian Economic Development Ministry on Monday said the country would enter a prolonged economic decline in 2015.

Russia's gross domestic product (GDP) might be 2.1 percent if the government's anti-crisis package is implemented as expected, which is 0.9 percent less than the base forecast, according to the ministry.

Meanwhile, Russia's production dynamics would also fall under the negative influence of export revenue contraction in energy products as well as world capital markets turning down Russian companies.

Data released also showed that deficit of Russia's consolidated budget is estimated at 4.6 percent of GDP, with the federal budget deficit at 3.8 percent and net deficit of oil and gas sector at 11. 5 percent.

According to the report published on the ministry's website, inflation this year might exceed the official forecast of 12.4 percent and reach 15.8 percent.

The highest pace of the consumer inflation is expected in March- April, when the consumer prices would grow up to 2.3 percent a month. The monthly inflation will slow down to 1 percent afterwards.

However, the report warned the risks of inflation speeding-up remains, because there is still room for ruble's potential depreciation due to restrictions on food import imposed by the Russian government as a response to Western sanctions.

Meanwhile, the ministry estimates that the unemployment rate in 2015 may reach 6 percent as small businesses would likely lay off workers and medium and large ones stop renewal of current personnel.

Russia's ailing economy has suffered due to mounting pressure from Western sanctions and global plummet of oil prices. In order to deal with unfavorable economic conditions, the Russian government published in January a 38-page anti-crisis austerity plan. Endite