STUTTGART, Germany, June 1 (UPI) -- It may be another year before the Russian economy recovers from deep recession and returns to growth, the country's economic development minister said.
With a 3.7 percent decline in gross domestic product last year, Russian Economic Development Minister Alexei Ulyukayev said the country was in a deep recession. The Russian Central Bank, however, said earlier this week that inflation was stabilizing and the economy was moving to the starting point of recovery.
Ulyukayev said first quarter GDP shrank by 1.2 percent, but recovered to about negative 0.7 percent by April.
"We expect that somewhere in the middle of the year we will reach zero and after that we will gradually restore positive economic growth," he said from Germany.
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The Central Bank said that, unless there are external shocks beyond its control, the Russian economy is on pace for slow growth. The recovery in crude oil prices, coupled with a more stable currency, is creating favorable conditions in the Russian economy.
"Consumer inflation is gradually settling down on the path towards the annual level of 6.5 percent and 4 percent for 2017," the bank reported this week.
A December review from the Central Bank of Russia said oil prices should return to $50 per barrel by the first half of 2016, but stay there until at least late 2018. Lower oil prices are expected to limit Russia's economic recovery, but the economy may become less exposed to commodity prices as it shifts to more productive industries.
Russian energy officials warned in March that a price above $50 per barrel of oil might skew markets heavily toward the supply side as energy investors look to capitalize on the forward momentum.
Crude oil prices are testing the $50 mark, up from lows below $30 per barrel early this year.
