UPDATE 1-Russia Oct GDP down 8.1 pct y/y, best in 8 mths

* GDP down 8.1 pct y/y, smallest fall since Feb

* Seasonally adjusted GDP estimated up 0.3 pct m/m

* Trade balance at $88 bln in Jan-Oct

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MOSCOW, Nov 23 (Reuters) - Russia's gross domestic product posted its smallest year-on-year contraction in eight months in October, the Economy Ministry said on Monday, likely reflecting improvement in retail sales and real wages.

GDP fell 8.1 percent on the year and rose a seasonally adjusted 0.3 percent on the month, said Oleg Zasov, acting head of the macroeconomic forecasting department at the ministry.

"The economy, adjusted for seasonal factors, is continuing to grow for a fifth month in a row," he told reporters.

Retail sales and real wages both rose on the month in October [ID:nLK595812], even as rising unemployment and lacklustre industrial output underlined the fragility of Russia's recovery from its first recession in a decade.

Russia was hit in the second half of 2008 by falling oil and commodity prices, investor flight from emerging markets and the global credit crunch.

This summer brought early signs of recovery from its first recession in a decade, with the economy returning to seasonally-adjusted quarter-on-quarter growth in the July to September period. [ID:nLK93407]

However officials have stressed that it is too soon to call an end to the crisis. Further proof of this came from the state postal service, which on Monday announced it would slash at least 33,000 jobs in 2010. [ID:nGEE5AM0GT]

Zasov also estimated November inflation at 0.3-0.4 percent on the month, in line with previous forecasts.

He said that Russia posted a trade surplus of $88 billion in January-October, up from the $75 billion reported for the first nine months of 2009.

Sizeable surpluses have helped fan a rally in the rouble in the past 2-1/2 months. But the trend could reverse as a stronger currency makes imports more expensive.

The Economy Ministry is due to release its GDP data on Tuesday. (Reporting by Darya Korsunskaya; Writing by Toni Vorobyova; editing by Patrick Graham) ((antonina.vorobyova@reuters.com; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net))