Page last updated at 12:17 GMT, Monday, 1 February 2010

Russia's economy contracts 7.9% in 2009

St Basil's Cathedral, Red Square, in the snow
2009 was a difficult year for the Russian economy

The Russian economy shrank 7.9% in 2009 compared with 2008, the Federal Statistics Service has announced.

This was less bad than the government's 8.5% forecast, but it was still the biggest annual fall in 15 years.

The oil exports that previously underpinned Russia's growth have been hit by a sharp drop in energy prices.

The preliminary official statistics show that the decline also sharply affected construction, manufacturing, restaurants and hotels.

However, 2010 may see a return to growth. Manufacturing data indicated a month of expansion in January, with the country's purchasing managers' index rising to 50.8 from the previous month's reading of 48.8.

Kingsmill Bond, strategist at Troika Bank, said he expected to see the Russian economy expand in 2010, since indicators such as retail sales had been growing since last summer.

The Federal Statistics Service did not give a quarterly breakdown of the latest GDP figure.

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