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    Minister says Russian economy already in recession

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    An economic recession has begun in Russia, where GDP growth is expected to fall below the 6.8% forecast this year, a deputy economics minister said on Friday.

    MOSCOW, December 12 (RIA Novosti) - An economic recession has begun in Russia, where GDP growth is expected to fall below the 6.8% forecast this year, a deputy economics minister said on Friday.

    "A recession has started," Andrei Klepach said. "We will face two quarters [of economic decline]."

    A country is commonly accepted to be in a recession when it experiences two consecutive quarters of decline in real GDP.

    Klepach did not say how much short of the 6.8% forecast GDP growth would be this year, but he did confirm recent media forecasts that industrial production would only grow 1.9% this year, not the expected 4.7%.

    Official statistics put GDP growth at 7.3% for the first nine months of the year, below the Economic Development Ministry's 7.7% estimate.

    The ministry has predicted GDP growth of 3-3.5% in 2009, in line with World Bank and IMF forecasts.

    However, a former senior finance official said on Monday that Russia's GDP would at best grow by 1-2% next year, while suggesting a worst-case scenario of a 4% contraction.

    Former Central Bank first deputy chairman Oleg Vyugin, who also served as a deputy finance minister and as head of the Federal Financial Markets Service, said Russia would see its smallest net export figures in 2009 as the prices of all raw material commodities exported by Russia were expected to hit record lows next year.

    Russian Prime Minister Vladimir Putin previously said Russia would see GDP growth of 6.8-6.9%, industrial production growth of 4.8%, and 13% inflation for 2008, against a target of 11.8%.

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