EU Says Russian Economy Slowly Coming Out of Recession
BRUSSELS. Nov 3 (Interfax) - The European Commission argued on Tuesday that the Russian economy is slowly picking up after the deep recession caused by the world financial crisis.
"Signs of recovery in financial variables appeared in March 2009 (when oil prices started to increase again), while indications of improvement in real variables only occurred by the summer of 2009," the Commission said in the Russia section of its autumn global economic forecast for the period from 2009 to 2011.
The year 2009 is expected to see GDP shrinking 7.2% but "a relatively mild recovery is foreseen for 2010 (2.3%), gaining some speed in 2011 (2.7%)," the Commission said in the document, entitled "Autumn
Forecast 2009-2011: EU Economy on the Road to a Gradual Recovery."
"The main reason behind this expected recovery is positive net exports, linked to a recovery in commodity prices," it said.
Unemployment is "foreseen to reach around 8%, falling slowly towards 7%, while inflation is expected to slow from 10.5% in 2009 to below 8% by 2011," it said.
"Russian policies used to counteract the downturn are very similar to the ones pursued in more mature economies: measures to support and recapitalize financial markets and institutions, enabling credit markets to continue to work, plus fiscal support packages for the wider economy," the Commission said.
"The growth models that relied more on primary sectors have seemingly shown themselves to be more affected by the downturn. Efforts for a diversification of growth sources towards a less commodities-biased economic structure could be intensified in the future," it said.
The period when GDP is falling should also see "a reduction of the current account and trade surpluses and by a swing from large fiscal surpluses to significant fiscal deficits," the Commission said.
"The EU economy will emerge from recession in the second half of 2009. A relatively strong temporary pick-up is in the cards for the near term, with a more gradual recovery foreseen in 2010-2011," it said.
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