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UPDATE 1-Russia Q4 GDP growth slumps to 1.1 pct y/y-EconMin

Published 02/06/2009, 10:14 AM
Updated 02/06/2009, 10:16 AM

(Adds quote from ministry review, analyst)

MOSCOW, Feb 6 (Reuters) - Russian economic growth slowed down sharply in the final quarter of 2008 to just 1.1 percent year-on-year, preliminary data from the Economy Ministry showed on Friday.

That was the slowest pace of growth since the economy stopped contracting in 1999 and undershot a consensus forecast for 2.0 percent growth [ID:nMSK000290]. In the third quarter, the economy grew 6.2 percent.

Without adjusting for seasonal factors, the economy actually showed a contraction of 1.9 percent in the final three months of 2008, the Economy Ministry estimated. Final quarterly data from the state statistical agency Rosstat is due out later this month.

"Strong consumer demand remains the main driver of economic growth," the ministry said in its 2008 economic review, pointing out that construction, transport and industrial production suffered most in the downturn.

Russia has forecast its economy to shrink by 0.2 percent in 2009 after 5.6 percent growth in 2008, provided that the price for oil, Russia's main export commodity, stays at $41 per barrel, but some analysts are saying the forecasts are too optimistic.

"We now expect GDP to decline on a quarter-on-quarter basis for four quarters and see the economy contracting 3.5 percent this year," said Rory MacFarquhar.

"We had previously expected growth to remain marginally positive. We are cutting our forecast for household consumption growth to 0 percent from 3 percent," he added. (Reporting by Toni Vorobyova; Editing by Andy Bruce)

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