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Russia avoids recession in second quarter: minister

Russia managed to avoid sliding into a recession in the second quarter, its deputy economy minister said Wednesday, citing preliminary estimates showing zero growth for the three months ending June.

The emerging giant was widely expected to post a technical recession with two consecutive quarters of contraction, after massive capital flight over the uncertainty caused by the Ukraine crisis.

“We were expecting a possible technical recession in the second quarter,” Russia’s deputy economy minister Andrei Klepach said, according to Interfax news agency.

But it now “appears that we will avoid recession, our preliminary forecast is one of zero growth after adjusting for seasonal variations,” he said.

Official data is due to be published by the statistics institute during the summer, although no specific date has been given.

Russia’s growth slowed down sharply in the first quarter as investors, fearing the impact of Western sanctions over Moscow’s annexation of Crimea, withdrew billions worth of their assets.

In the first three months of the year, output contracted by 0.3 percent compared to the previous quarter.

Klepach estimated that on an annual basis, Russia’s annual growth would better the 0.5 percent previously forecast.

“The situation is unstable, but we think… that the trend would be positive despite everything,” he said, adding however that it would be a “slight recovery rather than solid growth”.

The government has until now not issued any quarter to quarter growth forecast.

Economy minister Alexei Ulyukayev on Monday issued a year-on-year forecast, saying output expanded by 1.2 percent in the second quarter of the year.