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. Last Updated: 07/27/2016

Industrial Output Falls 3% in August

MOSCOW — Russia's industrial output declined by 3 percent in August against July, reversing the growth of the previous two months and indicating that recovery is still a distant prospect, according to figures released Tuesday by the Federal Statistics Service.

Industrial production fell 14 percent in January to August compared to a year ago and 3 percent compared to July. Manufacturing was on the rise in June and July.

The drop came a few weeks after several top officials announced a modest growth of the economy month-on-month. In the second quarter, Russia's GDP rose by 7.4 percent compared to the first quarter, although it is still down 10.9 percent year-on-year.

Russia's economy has been hit harder by the global economic troubles than most other emerging markets, in part because of Russia's heavy dependence on oil. The ruble has lost some 25 percent of its value since last summer and stock markets shrank by nearly 30 percent since last August as oil and commodities prices took a hit.

Observers and officials alike have since called for a diversification of the economy.

Finance Minister Alexei Kudrin said Tuesday that the third quarter would herald a full-fledged start of the recovery in Russia, Russian news agencies reported.

President Dmitry Medvedev, meanwhile, toned down the optimism as he warned at a meeting with experts that quarter-on-quarter improvements suggest that "this is still a recession" although the indicators are flattering.

He said the government expects Russia's economy to contract by 8.5 percent this year, the ITAR-Tass news agency said.