Russian economic growth slowing

Russia's economy is reliant on oil and metals

Russian economic growth slowed considerably in 2008 as the boom in commodity prices came to an end, official estimates have shown.

The country's Ministry for Economic Development said that growth fell to 5.6% for the year, from 8.1% in 2007.

The news pushed the rouble to new lows against the dollar-euro basket used as an official measure of the currency.

Last week, Russia's deputy prime minister said economic growth would be close to zero in 2009.

The Russian economy has been hit by the fall in the price of oil, which ended 2008 under $50 a barrel, having hit record highs of $147 a barrel in July.

Dramatic effect

The effect on the rouble has been dramatic.

The currency plunged to 40.80 roubles against the dollar-euro basket.

The Russian government has spent about $200bn (£141bn) - a third of its currency reserves - to prop up the rouble.

It said last month that it would allow the currency to drop to 41 roubles against the basket before intervening again.

"Downward pressure seems inevitable," said Chris Waefer at Uralsib Bank in Moscow.

"If financial reserves continue to fall fast, then pressure will increase for a further band widening, rather than putting the country's investment grade standing at risk."