Russian Finance Ministry sees risk of technical recession in Q2

Russian Finance Ministry sees risk of technical recession in Q2
# 21 April 2014 23:42 (UTC +04:00)

Baku-APA. Russian economy in the second quarter of this year risked sliding into a "technical recession," a senior official said Monday, APA reports quoting Xinhua.

"In the second quarter, the second time in a row, the gross domestic product (GDP) will likely be negative again compared to the first quarter," Maxim Oreshkin, head of the Finance Ministry's Department for Strategic Planning, told reporters.

"Thus, the Finance Ministry can't rule out a technical recession," he added.

The technical recession is a definition for two consecutive quarters of economic slowdown.

According to the Ministry for Economic Development, Russia's GDP dropped 0.5 percent from the last quarter of 2013.

Russian consumers have supported the GDP growth in the first quarter by increasing spending in anticipation of inflation rate hike. That engine will exhaust itself in the second and third quarters, Oreshkin warned.

"We don't rule out negative growth in one of these quarters," the Interfax news agency quoted him as saying.

Earlier this month, Russian Prime Minister Dmitry Medvedev attributed economic difficulties to the attempts of "some forces," not elaborating what or whom he has implied.

In late March, Economy Minister Alexei Ulyukayev warned Russia's GDP would slow down to 0.6 percent this year from 1.3 percent in 2013 should the forecast of 100-billion-dollar capital outflow become a reality.

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