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. Last Updated: 07/27/2016

Economy Will Show Growth In 2nd Half, Nabiullina Says

MTA man taking a break with his sandwich board offering a crisis sale on secondhand goods near Belorussky Station on Monday. The Economic Development Ministry said GDP will grow in the second half of 2009.

The economy will grow by 3.9 percent to 4.5 percent in the second half of 2009 compared with the first half, Economic Development Minister Elvira Nabiullina told Prime Minister Vladimir Putin on Monday.

Nabiullina also said in remarks published on the government’s web site that the economy could have also passed the lowest point of the recession, citing a 0.3 percent month-on-month uptick in capital investment in July.

“These positive signals give us hope that we have passed the lowest point of our economic development during the summer, and we have a good chance to retain positive dynamics,” Nabiullina said.

“We also hope to see economic growth in 2010,” she said.

The economy, hit by a fall in commodity prices last year, high corporate debt and a fall in domestic demand, is still expected to shrink by 8.5 percent in 2009, its worst performance in a decade.

Nabiullina said output growth in export-oriented extraction industries, registered in the last few months, is also spreading to more sophisticated equipment-building sectors that target domestic consumers.

Many economists argue that positive developments were merely a result of increased commodity prices, but Nabiullina said domestic factors such as fiscal stimulus and demand from state-controlled natural monopolies also played a role.

She told Putin that the government still needed to see positive developments in growth in credit to enterprises before it could come to any conclusions, but she said lower inflation would ease credit constraints. “For the first time since 2005, we have such low monthly inflation … and this is despite such the injection of state funds into the economy,” Nabiullina said.