Russia’s economy contracted in September at the slowest monthly pace this year, a gauge of output showed, the latest evidence that the world’s biggest energy exporter is moving toward recovery.

Gross domestic product shrank 2.1 percent in August from the same month last year, after a 3.9 percent contraction in July, VTB Capital said in a report Tuesday. The economy shrank an annual 4.1 percent in the third quarter compared with 9.2 percent in the previous three month period, according to VTB.
“The setback in industrial production in August was likely temporary and output might rebound strongly,” Aleksandra Evtifyeva, a senior economist at VTB Capital, said in the report.
“The total activity index rose from 52.2 to 54 over the month, indicating an acceleration in economic recovery.”
Seven central bank rate cuts since April and government stimulus measures have helped offset some of the fallout of shrinking trade and dwindling credit flows.
After a record 10.9 percent contraction in the second quarter, output stopped shrinking in June, giving cause for “cautious optimism,” Prime Minister Vladimir Putin said on Sept. 29.
“Growth in the services sector accelerated on new business orders, but was accompanied by a higher rate of job shedding,” Evtifyeva said. “The latter remains the only factor that might hamper the otherwise optimistic near-term outlook.”
The unemployment rate fell to 7.8 percent in August, lower than previously estimated and compared with 8.3 percent in July, as seasonal demand for labor in agriculture and construction picked up.
The number of unemployed was 6 million, the Moscow-based Federal Statistics Service said in an e-mailed statement on Monday.
VTB Capital calculates the indicator by using output measures from its Purchasing Managers’ Indexes, which are surveys of business conditions in manufacturing and services industries.
(Source: Bloomberg)