Azernews.Az

By Bloomberg

Russia’s services activity shrank for a fifth consecutive month, at its fastest rate of decline since March 2009 as demand weakened.

The Russia Services Business Activity Index declined to 41.3 in February from 43.9 in January, according to data released by HSBC Holdings Plc and Markit Economics. The median estimate of six economists surveyed by Bloomberg predicted contraction to 42.5. A reading below 50 signals contraction.

The economy of the world’s biggest energy exporter is entering its first recession since 2009, hurt by oil prices trading at a six-year low and sanctions imposed by the U.S. and its allies over the Ukrainian conflict. The Economy Ministry estimates gross domestic product will fall 3 percent this year.

“The Russian economy contracted at a sharper rate in February,” Trevor Balchin, senior economist at Markit, said in the statement. Survey data for January and February point to a GDP contraction of about 2 percent in the first quarter from a year earlier, according to Balchin.

A contraction in manufacturing eased unexpectedly last month, climbing to 49.7 from 47.6 in January, after the weaker ruble and the retaliatory food-import ban imposed by President Vladimir Putin in August boosted local production.

The Economy Ministry estimates that gross domestic product shrank 1.5 percent in January from a year earlier. The economy will take two or three quarters to adjust to new external and domestic conditions, Kirill Tremasov, head of the ministry’s forecasting department, said Feb. 20.