Russian productivity fell by 20% in January 2009

Feb 18th, 2009 | By | Category: Rouble News

In January 2009, web the industrial product of Russia fell 20%, story which is the largest decline since records began in 2002.

The figures have resulted in a realization that the Russian economy is in worse shape than previously thought and that the nation’s GDP is expected the drop more than originally expected this year.

Nomura Investment Bank’s chief economist, Ivan Tchakarov, told the Financial Times, “the horrendous industrial production data in January have left no doubt that the economy has come to a screeching halt.”

Russia’s president, Dmitry Medvedev, recently sacked four regional governors, in a move seemingly linked to unemployment levels, although there is some speculation that it may be the result of anti-corruption investigations.

Officials now say the country is in recession following the lack of domestic demand caused by the devaluation of the rouble, the fall in oil price and the shortage of credit.

Economists claim banks stopped lending as repayments dried up during summer 2008’s rouble devaluation process. The currency now seems to have stabled somewhat and the government hopes banks will begin lending again soon.

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