(Adds background, comment, debt data)
MOSCOW, April 1 (Reuters) - Russian companies and banks paid back nearly $50 billion of foreign debts in the final quarter of 2008, and the contraction gripping the country's manufacturing sector eased in March, data showed on Wednesday.
Rising oil prices, a more stable rouble and some signs of improvement in economic indicators suggest that the worst of the financial crisis could have passed for Russia, although economic growth is not expected to return until the final quarter of the year.
The VTB Capital Purchasing Managers' Index (PMI) rose to a 5-month high of 42.0 in March, although it remained well below the 50 mark that separates expansion from contraction.
"The outcome points to the eighth successive month of contraction, longer than that recorded during the 1998 financial crisis," said Dmitri Fedotkin, economist at VTB Capital.
"On a more positive note, the stocks of unsold goods declined which, combined with a sluggish contraction of new business sub-index, both suggest that the headline index may keep rising into the second quarter, albeit with no sharp recovery expected."
The PMI poses upside risks to forecasts that March industrial output would shrink 12.3 percent year-on-year after February's fall of 13.2 percent [ID:nLV949214].
"Signs of a recovery in the worst-hit manufacturing sector also provide support to the rouble, suggesting no need for further devaluation in order to prop-up economic activity," analysts at UniCredit said in a research note.
Weathering the financial crisis -- Russia's deepest since the 1998 sovereign default and rouble collapse -- is seen as key for maintaining political stability and avoiding social unrest.
For the Russian economy, downside risks remain, not least from the large volumes of foreign currency corporate debt whose refinancing has been impeded by the credit crunch.
Banks' and companies foreign debts fell by $47.4 billion in the final quarter of last year to $451.9, central bank data showed [ID:nL1944337], suggesting the burden is slowly easing.
Troika estimated that planned maturities were around $70 billion, and thus over $20 billion was actually refinanced.
"It should be considered a huge success for domestic borrowers to have refinanced such a significant volume of external debt. If this trend continues, then the volume of cumulative external debt could decline to $70-90 billion by year end," it said in a research note. (Reporting by Toni Vorobyova; Editing by Ruth Pitchford)