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Russian services sector contracts at fastest rate in nearly six years in February
[MOSCOW] Russia's service sector contracted in February at the fastest rate in nearly six years, hit by a steep drop in new business and a fall in employment, a survey showed on Wednesday.
Russia's economy has been hit by the impact of sanctions imposed by Western countries over Moscow's involvement in the Ukraine crisis and by weak oil prices.
The HSBC purchasing managers index (PMI) fell to 41.3 last month from 43.9 in January, indicating the fastest rate in decline since March 2009. The figure stayed below the 50 mark that separates expansion from contraction for a fifth consecutive month.
The data for the services sector, which accounts for about 60 per cent of Russia's gross domestic product, followed on the heels of data showing that manufacturing activity continued to shrink in February but at a slower pace than in the previous month.
In the services sector, new business decreased for the sixth successive month in February, suffering from a weaker rouble, which has been battered by sanctions and declining oil prices.
"Based on the historical relationship between the PMI and GDP, survey data for the first two months of the year point to a year-on-year fall in GDP of around 2 per cent in the first quarter," said Alexander Morozov, chief economist for Russia and CIS at HSBC.
Employment fell for the third time in four months in February and at the fastest rate since July 2009.