Russian economy falls by 7.9 per cent in 2009

The Russian economy endured its worst performance for 15 years in 2009, figures published by the Federal Statistics Service (FSS) showed today.

The 7.9 per cent contraction was actually better than the 8.5 per cent fall that had been predicted by the Moscow government, but affected all aspects of the Russian economy. Oil exports, which had previously underpinned growth, were hit by falling demands for energy. The GDP fall comes after Russia reported growth of 5.6 per cent in 2008.

Russian GDP is expected to rebound in 2010, however. Rising energy demand and prices are expected to provide a fillip, with economists adding that the recovery started in the fourth quarter. The FSS is yet to publish specific fourth quarter figures.

“The most important factor was obviously the reversal of the trend in global markets and the rise in commodities prices,” UralSib economist Vladimir Tikhomirov told Bloomberg. “This was very important for the bounce-back in the fourth quarter.”

The economy will expand about 3.1 per cent this year and there may be a “quick return to a growth trajectory” of 5 per cent to 6 per cent, the government said at the end of last year.

The government exceeded its budget revenue target for the year by 9.3 per cent, leading to ratings agencies Standard & Poor’s and Fitch raising their outlooks, citing improving finances.