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Russian economy stagnates as capital flight hits US$75 billion

Published on Jul 10, 2014 2:57 AM

MOSCOW (Reuters) - Russia's economy is stagnating as data showed on Wednesday that capital worth US$75 billion has left the country so far this year following sanctions on Moscow over its involvement in Ukraine.

"We have for now a period of stagnation, or a pause in growth," Deputy Economy Minister Andrei Klepach was quoted as saying in an interview where he also said that GDP was flat from April to June after shrinking 0.5 percent in the first quarter.

Mr Klepach, speaking to Interfax news agency, noted that the second-quarter figure of zero growth over the three months, previously unpublished, indicated that Russia had avoided a"technical recession" - two successive quarters of GDP decline. But central bank data on capital flight showed investors are concerned about the state of the $2 trillion a year economy.

Though the outflow slowed in the second quarter, the US$75 billion that left in the six months to June already surpassed the US$62.7 billion capital flight seen for the whole of last year.

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