Crisis-battered Russian industry slows 16.9%

Russian industrial production plummeted 16.9 percent in the year to April, the government said Monday, reflecting the impact of the global economic crisis on the country's once-booming economy.

The data emerged in the state statistics agency's latest update of Russian economic indicators. Industrial production dropped 8.1 percent from March to April, according to the same report.

April was the sixth consecutive month in which industrial production fell, and the drop of 16.9 percent was worse than a forecast by analysts at UralSib investment bank in Moscow, who predicted a drop of 14.1 percent.

Factories have slashed production as Russia's once-booming economy has been hit hard by the crisis, despite initial claims by government officials that the country would be protected from global turmoil.

Among the hardest-hit sectors are automobile manufacturing, where production plunged 55.9 percent in the year to April, and construction, reflected in a 34.7-percent fall in cement production.

Production of natural gas -- one of Russia's main exports -- dropped 24.3 percent, the statistics agency said, as customers in Europe have scaled back their consumption amid the global crisis.

Russia's economy has been hurt by falling prices for oil, gas and other commodities and many of its billionaire industrialists have found themselves unable to pay back massive debts they took on during the boom years.

However Prime Minister Vladimir Putin was upbeat on Monday, after one of his deputies told him the number of officially registered unemployed people had dropped by 30,000 over three weeks -- the first such drop since October.

"This is the first positive tendency on the labour market.... We will hope that this is at least partly the result of our work," Putin said during a cabinet meeting, quoted by Russian news agencies.

But the drop of 30,000 is relatively small and the measure is separate from the unemployment rate as defined by the International Labour Organisation, which is generally seen as a more accurate gauge of joblessness, analysts said.

The government may not release that figure this week along with its usual monthly reports because of concern over publishing bad news, said Chris Weafer, chief strategist of UralSib investment bank in Moscow.

"There is a question mark over whether the unemployment data will be published," Weafer said in a note to investors.

"At end April the rate is expected to have exceeded 10 percent, or more than 7.5 million people, and may be deemed too sensitive for publication."

Russia's economic development ministry has said that gross domestic product (GDP) could shrink by six percent this year after contracting by an alarming 9.5 percent in the first quarter.

Last month the World Bank said the Commonwealth of Independent States (CIS), a grouping of Russia and 11 other ex-Soviet republics, would experience "the largest reversal of economic fortune" of any region amid the global crisis.