Russian Recession Ending

MOSCOW (AP) -- Russia is likely emerging from its deep recession, a top governmental official said Monday, noting an improvement in the latest economic output figures for July.

Gross domestic product rose 0.5 percent in July from the previous month and was down 9.3 percent compared with the same month in 2008, according to Deputy Economic Minister Andrei Klepach.

The yearly rate is a smaller decline than the 10.1 percent drop recorded in June and the 11.5 percent in May.

"We can say with a degree of certainty that the recession is generally over, and the economy is moving to recover," Klepach said, according to the state news agency RIA Novosti.

Klepach also pointed to the fact that industrial output in Russia has been growing month-on-month since May, but warned that growth statistics could be slowed by a seasonal correction, the halt of production at Russia's largest car maker AvtoVAZ and the deadly accident at Russia's largest power plant.

Russia is weathering its biggest recession in a decade. Its economy has already contracted by over 10 percent this year and the government is running a 7.5 percent budget deficit -- its first in a decade. It has been the hardest hit of the major developing economies as oil prices plunged from last year and demand for metals dropped off.

President Dmitry Medvedev said this month that Russia has suffered more than expected because of its overdependence on oil exports. He warned that Russia's economy will have "no future" unless it diversifies more thoroughly.

The Aug. 17 blast at Russia's largest power plant in southern Siberia has stretched the region's energy supply and raised concern over the country's aging infrastructure and underinvestment.

Medvedev on Monday lashed out at commentators who in their "apocalyptic comments" on the power plant accident predicted "a technological end for Russia, a Chernobyl of the 21st century."

In televised remarks, Medvedev dismissed these comments as "blunt lies" but acknowledged that they address a real -- if manageable -- problem.

"The truth is, however, that our country is technologically very far behind," he said. "If we fail to overcome this challenge, those threats can become real ... but we've got all it takes to bridge this gap."

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