The economy in Russia is showing mixed signs, according to Federal State Statistics figures released for the quarter to the end of June 2009.

The economy shrunk, on an annualised basis, by 10.9 per cent in the second quarter, which was more than was forecast and exceeded the 9.8 per cent annualised fall in the first quarter.

However, if we look at the economy in comparison to the first quarter, rather than the annualised rate, the economy expanded by 7.5 per cent in the three months to the end of June 2009.

Despite this slightly positive indicator, Russia has suffered from a fall in oil prices from their $147 per barrel peak last year.

The fact that very little money is being lent by banks is also a key problem, according to Chris Weafer, a Moscow-based analyst with Uralsib bank. He says the economy’s problems are “much worse than expected” and that the oil prices were not the only problem.

Russia now expects its economy to contract by as much as 8.5 per cent over 2009.