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Russian economy slumped 3.7% in 2015

Staff writer |
Consumer demand and capital investment in Russia declined in 2015, sending the economy into recession, official data showed.

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As two of the economy's key drivers fell, Russia's gross domestic product contracted 3.7% amid falling oil prices and Western sanctions, according to data from the Federal Statistics Service, confirming previous estimates.

Retail sales, which reflect the strength of consumer demand, fell 10% last year, while capital investment shrank 8.4%.

Russians' real disposable incomes declined for the second year in a row, falling 4% in 2015 due to inflation that hovered above 15% for several months last year.

In 2016, the oil-dependent economy is likely to contract further, analysts say, as world oil prices have fallen well below $50 a barrel, a level factored in the current version of 2016 budget.

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