Finance ministry: Russia may suffer second-quarter recession

Russia could tip into recession in the second quarter of 2014 after the economy contracted by around 0.5 percent in the first three months of the year, a finance ministry official said Monday."It looks like the second quarter compared with the previous quarter will again have a negative value. In this way, the finance ministry does not rule out a technical recession," the Interfax news agency quoted Maxim Oreshkin as saying.Oreshkin, who heads the finance ministry's department for long-term strategy, made the prediction in comments to journalists. Finance Minister Anton Siluanov warned last week that Russia's economy might not expand at all in 2014.Siluanov said Russia was facing the toughest economic conditions since 2009, when it went into a deep slowdown.Russia's economic development ministry last week announced that the economy had shrunk by 0.5 percent, fuelling concerns that the Ukraine crisis could tip it into recession, which is defined as two consecutive quarters of shrinking economic output.Russia's economy has already seen colossal capital flight since the start of the Ukraine crisis as worried investors have pulled out of the country.Oreshkin predicted that net capital flight from Russia in 2014 would be $70 to $80 billion, less than a prediction of $100 billion made by the economic development ministry earlier this month.Russia has seen growth fall in recent years, from 4.3 percent in 2011 to 1.3 percent last year, blamed by experts on its overdependence on energy exports and failure to modernise the economy.The latest predictions follow a series of increasingly gloomy assessments this month, including from the International Monetary Fund which slashed its forecast for Russia's 2014 growth by two-thirds to 1.3 percent due to political uncertainty.