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Business

Russia's industrial output is still falling sharply

Text by NEWS WIRES

Latest update : 2009-06-16

Once considered as Russia's most important growth factor, the country's industrial output continues its decline. In May, it fell 17.1% compared to last year after a previous decline of 16.9% in April.

AFP - Russian industrial production tumbled 17.1  percent from a year earlier in May, the statistics office said on Tuesday, marking a further acceleration in the decline of previous months.
  
Industrial output slumped 16.9 percent in April and 13.7 percent in March.
  
The figures were worse than already gloomy predictions, according to the Interfax news agency, which said the market consensus was for a 13.1-percent fall in May.
  
Russia's once-booming, export-oriented industry has stumbled under the weight of the economic crisis and the figures are the latest blow to government hopes that the country is on the verge of recovery.
  
In the first five months of this year, industrial output dropped 15.4 percent compared to the same period in 2008, the state statistics office said.
  
The automotive industry, which saw output fall 63.9 percent in May, is among the worst hit sectors as demand plummets in what used to be hailed as the world's fastest growing markets for cars.
  
Cement production slumped 24.9 percent in May.
  
Production of natural gas -- one of Russia's main exports -- dropped 28.7 percent, the statistics office said, as customers in Europe scaled back consumption amid the economic difficulties.
  
The statistics office also noted 11.7 percent lower output for coal.
  
Russia's economy -- poorly diversified and suffering from the fall in demand for energy -- has seen many factories shut their doors or switch to shorter work hours.
  
The government has kept a watchful eye on the situation, fearful that a production slowdown could provoke social unrest in Soviet-style regions and towns that are almost dependent on one industry for their livelihood.
  
Russia's economic development ministry has said the economy as a whole could shrink by six percent this year after contracting by an alarming 9.8 percent in the first quarter.

Date created : 2009-06-16

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