(Releads with government reaction, adds background)
By Toni Vorobyova and Gleb Bryanski
MOSCOW, Dec 12 (Reuters) - Russia's chief macroeconomic planner ran into trouble with Prime Minister Vladimir Putin on Friday, after saying Russia was already in a recession.
"It (recession) has started already. I'm afraid it will not be over in the next two quarters," Deputy Economy Minister Andrei Klepach told reporters.
The comments, the first official acknowledgement the economy was shrinking, came at the end of a week of bad numbers: third quarter GDP growth was the slowest in three years and the October trade surplus hit a 13-month low [ID:nL936258].
Within hours, Prime Minister Vladimir Putin told a different story, trumpeting full year growth of around 6 percent for 2008 and predicting that Russia would weather the financial storm.
The Kremlin's international public relation advisers then distributed a statement marked "URGENT" using Putin's remarks to imply that Klepach's assessment was wrong.
"In connection with the statement of deputy economics minister Andrei Klepach to the effect that a recession was starting in Russia, we would draw your attention to the words of Prime Minister Putin today," the e-mailed statement said.
"We would be grateful if you could correct any coverage suggesting that Russia is in recession," the mail concluded.
Putin forecast full-year growth of around 6 percent, down from the 6.8-6.9 percent he mentioned last week, but still implying expansion in the fourth quarter. "I am sure our economy is solid enough to weather the period of instability," Putin said. But he conceded that falling commodity prices could see Russia's trade balance slip into a deficit, something not seen since 1998.
MIGHT BE SHARPER
Russia's economy is under pressure as the global financial crisis threatens the first reversal after a decade of growth fuelled by prices for oil, the country's main export commodity. It last saw a recession 10 years ago after the 1998 crisis.
Russia's Q3 GDP growth at 6.2 percent year-on-year was still positive. But analysts say Q3 could have been the last quarter of positive growth, and that both Q4 2008 and Q1 2009 could be negative -- two successive quarters amounting to recession.
Electricity usage and power prices dropped sharply in November in Russia's industrial heartland, signalling a sudden drop in economic activity.
Local banks and brokerages in Moscow are reluctant to provoke official anger by predicting a recession next year but senior bankers tell a different story in private conversations.
"The statement (from Klepach) suggests the deterioration of economic conditions might be sharper than previously expected and feared," said Vladimir Osakovsky, analyst at UniCredit.
Klepach has been working on a new macroeconomic forecast in recent weeks and its official release has been delayed several times. The forecasts should serve as a basis for the anti-crisis plan and a 2009 budget revision due in January.
In a public speech ahead of a first scheduled release of the forecast on Dec. 1, Klepach halved his 2009 projection for economic growth to 3.0-3.5 percent and for the price of oil to an average of $50 per barrel -- still more optimistic than many private forecasts by bankers.
In the following days, the Vedomosti daily reported, quoting government sources, that the Economy Ministry predicted an average rouble exchange rate of 32 roubles to the dollar in 2009, up from 27.65 now.
The forecast was never released under the pretext that Klepach's boss, Economy Minister Elvira Nabiullina, had yet to sign it. The ministry officially said all the numbers released by Klepach or leaked to the media were preliminary.
The government has repeatedly said it is in full control of the situation and will not allow sharp exchange rate fluctuations or a repeat of the 1998 financial meltdown - a view broadcast daily by state-owned national television channels.
Klepach did not take repeated phone calls from Reuters and his office turned down an interview request. Klepach, known as a liberal economist, was promoted to the rank of deputy minister earlier this year.
HURT BY OIL
Speaking to reporters earlier in the day, Klepach confirmed earlier press reports his ministry expects full-year industrial output growth of just 1.9 percent, even though production rose 4.9 percent in the first 10 months.
"It will be around that because of the big slowdown starting from October, but especially in November and December," he said.
The worsening economic outlook was one of the reasons cited by Standard & Poor's when it this week became the first ratings agency in a decade to downgrade Russia's sovereign rating.
Of the other agencies, Fitch has Russia on negative outlook with a view to a possible rating downgrade, while Moody's on Friday changed its outlook to stable from positive. (Additional reporting by Oleg Shchedrov in Moscow)