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Bank Rossii Eases Further As Russia's Economy Contracts At A Record Rate

The ECB's Balance Sheet At A Glance.

Wednesday, July 16, 2008

Russian Industrial Output Growth Nosedives In June 2008

Russian industrial production rose in June at an incredibly low year on year rate of 0.9%, down from 6.7% in May, and the slowest pace in five and a half years as production of locomotives, cement and oil fell. The result was the slowest rate of growth since the Russian Statistical Service (Rostat) began calculating industrial production under a new methodology in 2003. Production dropped 1.4 percent from May.

Production of locomotives fell by 20 percent, while output of buses dropped by 16.6 percent, the service said. Cement production was down 13.5 percent and steel pipe output eased 4.3 percent. State orders for goods have lost momentum since government changes carried out in early May, when Vladimir Putin, appointed prime minister on May 8 after leaving the presidency, moved officials from the Kremlin into new administration roles.

Russia's economy grew 8.5 percent in the first quarter. Annual investment growth averaged more than 20 percent in the first three months, spurring expansion in the construction and retail industries. ussian Railways, which operates the world's longest train network, said in February that it is seeking to raise 325 billion rubles ($14 billion) in the next three years to help expand and upgrade its train network.

Manufacturing increased an annual 0.6 percent in June, compared with 10 percent the previous month, the service said. Mining and quarrying rose 0.6 percent, compared with growth of 0.1 percent in the previous month. Crude oil and gas condensate production fell 0.8 percent compared with a year ago. Electricity, gas and water output increased an annual 4 percent in June, compared with 2 percent in the previous month.

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