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. Last Updated: 07/27/2016

Industrial Production Slows Down

Industrial output growth slowed in April, with the crucial resources sector nearing stagnation even as oil prices held near record levels, figures showed on Thursday.

Headline output rose 5.0 percent year on year, above March's gain of 4.6 percent but below the 5.4 percent posted in April 2004, according to numbers from the State Statistics Service that not seasonally adjusted.

More volatile monthly figures showed a 3.6 percent decline in April after an 8.1 percent rise in March, with recent figures pointing towards a flattening out of a growth trend.

Raw materials extraction, which includes oil -- Russia's key export -- rose by just 1.1 percent year on year in April, after a 3.0 percent gain in March.

That confirmed official figures which show that oil output has stagnated since autumn of last year, as the state-driven breakup of oil major Yukos entered its decisive stage, unsettling investors.

"It's clearly a decline overall compared to previous years. Production in the oil sector is declining," said Yaroslav Lissovolik, an economist at UFG brokerage.

On the positive side, manufacturing output rose in April by 7.8 percent year on year, up from 4.2 percent in March.

"The bright spot is manufacturing, but the specter of currency appreciation is likely to weigh on this sector increasingly," added Lissovolik, who has a bearish forecast of 4.5 percent industrial production growth for this year.

"What we're seeing is an economy that is driven by the large companies but these companies are not doing the investment they should have the capacity to do, given the high oil price," said Peter Westin, an economist at Aton brokerage.