Russian central bank says recession in past, slow growth ahead

Russia’s central bank on Monday said that GDP figures show the country is moving out of its protracted recession and returning to tentative growth.

“The evaluation of the Russian GDP shows that the recession is now behind us and ahead is slow economic growth,” the bank said in a note.

The Bank of Russia estimated that growth in the second quarter of 2016 hit 0.2-0.3 percent and said it had boosted its forecasts to 0.4 percent growth in the third quarter and 0.5 percent in the fourth quarter.

Russia has been battered by the longest recession to hit the country during President Vladimir Putin’s more than 16 years at the helm caused by low oil prices and Western sanctions over the Ukraine crisis.

Officials have previously insisted the recession is slowing and economy minister Alexei Ulyukayev predicted that the economy will shrink by 0.2 percent overall this year after a drop of 3.7 percent in 2015.

International experts however remain more downcast on Russia’s prospects with the IMF forecasting GDP will shrink by 1.2 percent this year.

The economic crisis has hit the spending power of average Russians hard as the ruble has tanked and the situation remains grim despite the apparent first shoots of recovery.

In a sign that the rebound is by no means certain the car industry announced yet further woeful results with sales in July dropping by some 16.6 percent compared with the same month last year.

The car industry in Russia has been brutalised by the economic crisis and the latest statistics from industry manufacturers were even worse than the drop in 12.5 percent in June.

Car sales in Russia have almost halved as the economic woes have bitten into a market that once drew large investment from foreign auto giants.