MOSCOW--Russia's economy, hit by Western sanctions, stopped
growing in September, data from the economy ministry showed
Wednesday.
Russia this year is on track to post its lowest growth since
2009. Russia's standoff with the West over the Ukrainian crisis
adds downside pressure on the economy as sanctions and geopolitical
uncertainty fuel capital flight and kill investment activity.
Alexei Ulyukayev, Russia's economy minister, said that in the
first nine months of 2014 the economy grew by 0.8%, Interfax news
agency reported.
Official data showed last month that in the January-August
period gross domestic product expanded by 0.8%, suggesting that
economic growth halted in September.
The government expects the economy to grow by 0.5% this year
compared with 1.2% in 2013 and nearly a decade of annual average
growth of some 7% seen before the global financial crisis.
The ruble's drop to all-time lows this month carries additional
downside risks for economic growth as companies usually stop
investing and start looking for ways to hedge their funds at times
of increased exchange rate volatility.
Pressured by capital outflows on the back of Western sanctions
and domestic demand for dollars and euros, the ruble was last hit
by a slide in oil prices beyond $90 per barrel, which is more than
$10 below an average price envisaged by Russia's 2014 budget
plan.
Russia's Energy Minister Alexander Novak said Wednesday he hopes
that oil prices will recover to the range of $90-$110 per barrel in
the midterm, Interfax reported.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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