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Russia at risk of deep recession, says Medvedev

Moscow, Dec 24  Russian Prime Minister Dmitry Medvedev has warned that the country stares at a “deep recession” and accused some countries of deliberately hindering Russia’s economic progress, alluding to the West.

“Setting too modest goals creates a risk of falling into a deeper recession than what otherwise would be the case,” Medvedev said during a meeting Tuesday with senior officials of his United Russia party.

He acknowledged that the government would face “many difficulties” in the near future and probably would have to intervene in the economy, but he insisted that it “has the situation under control”.

The Russian prime minister described the central bank’s decision to raise the key interest rate to 17 percent, causing a record depreciation of the rouble, as an “absolutely provisional measure” aimed at stabilising the currency markets.

He hoped that the rates would fall as soon as conditions allowed them to, and vowed to take all necessary measures to ensure that it happened.

Medvedev indicated that the Russian economy was already in a bigger recession than the one into which it had plunged in 2009, when its GDP contracted for the first time in a decade.

The situation was more complicated now, because back then, the crisis affected the world’s industrialised countries which worked together to overcome it, but now “a number of countries” seek to obstruct the development of the Russian economy, Medvedev explained.

The US and its allies have imposed several rounds of sanctions on Russia over its alleged role in the Ukraine crisis, seriously affecting the Russian economy.

US President Barack Obama Friday signed an executive order, imposing a ban on new investments in Crimea and barring trade in goods, technology or services with the Ukrainian region, which joined Russia after a referendum in March, without recognition from Kiev and the West.

On the same day, Canadian Prime Minister Stephen Harper announced restrictions on the export of technology in relation to Arctic, deep water and shale oil exploration and extraction to Russia.

The sanctions came a day after the European Union (EU) unleashed similar sanctions on Moscow in connection with Crimea’s annexation by Russia.