OREANDA-NEWS. April 24, 2009. The Ministry of Economic Development has lowered its estimates for Russia’s GDP drop in the first months of 2009 and in the first quarter of the year, as a whole, and expects the national economy to decelerate around 6% by the end of the year, as the International Monetary Fund (IMF) forecasts.

Deputy Economic Development Minister Andrey Klepach said Thursday that this January his ministry cut the estimate for GDP reduction against January 2008 to 10.4% from 8.8% and from the earlier 7.3% to 8.7% in February. In March, as the ministry calculated, GDP declined 9.5% and by the same percentage the national economy decelerated compared to January-March 2008. Previously, the ministry projected GDP contraction at 7% in 1Q 2009.

“What’s the reason for a deeper recession in the first quarter than we expected earlier? To the large extent, this is driven by the fact that the construction industry has yet to recover, despite sizeable resources put aside and a decline in housing prices has not been seen,” Klepach said. The deputy minister said that the second reason is no growth in household and corporate lending. According to him, in nominal terms credits granted to enterprises have not grown since November 2008 and have decreased in real terms.