Russia's economy shrank 9.5% in first quarter - ministry

23/04/2009 17:54 MOSCOW, April 23 (RIA Novosti) - Russia's gross domestic product (GDP) declined by an annualized 9.5% in January-March 2009, an Economic Development Ministry official said on Thursday.

Andrei Klepach, a deputy economics minister, said that the GDP decline in March also equaled 9.5%.

Klepach said the substantial decline in the first quarter was attributable to the slump in construction (a decline of about 20%) and lower tax revenues. The GDP also shrank due to reduced investment and retail trade volumes, Klepach said.

The economics ministry expects the country's GDP to decline 8.7-10% in April-June 2009 as compared with the same period of last year, Klepach said, adding, however, that the Russian economy "was beginning to rebound."

According to the ministry's estimates, Russia's economy will grow by 1.3% to 2.8% in the second quarter of 2009 as compared with January-March 2009.

Klepach said that the economics ministry would revise downwards its forecast of the country's GDP decline from the current 2.2%, adding that the figure given by the IMF was quite realistic.

The IMF issued a report earlier this week, saying that Russia's economy would shrink 6% in 2009 and grow 0.5% in 2010.