(Adds new cabinet, c.bank measures)
By Gleb Bryanski
MOSCOW, Dec 15 (Reuters) - Russia is not in recession yet and next year's economic growth could be up to 3 percent, Finance Minister Alexei Kudrin said on Monday, despite leaked data showing a sharp slowdown in industrial output.
Industrial production fell 8.7 percent year-on-year in November, while producer prices dropped by a record 8.4 percent month-on-month, Interfax news agency reported, quoting unnamed sources.
"We are not in recession yet," Kudrin told a news conference after a government session.
Deputy Economy Minister Andrei Klepach, who oversees macroeconomic forecasting, caused a stir last week, when he said Russia -- which has seen average growth of around 7 percent in the past five years -- was in recession.
Kudrin said Russia plans to boost growth rates through tax cuts, interest rates subsidies, state guarantees, equity injections, lower growth in regulated prices and stimulating demand in housing and infrastructure sectors.
"Taking into account these measures in our new forecast, we expect positive growth next year, up to 3 percent," Kudrin said.
That marks a sharp slowdown from 2008, for which the Economy Ministry estimates fourth quarter economic growth at 2.6 percent year-on-year and full-year growth at 6.0 percent. The Ministry sees 2008 industry growth at 1.9 percent from 5.2 percent. The government is working on a new forecast, the release of which has been delayed due to uncertainty over economic prospects. Industry Minister Viktor Khristenko said authorities will get better visibility by the end of the first quarter 2009.
PAINFULLY REMINISCENT
Kudrin said the government has created a list of 300 enterprises with sales of no less than $540 million and employing no less than 4,000 people, which will receive state support, and was ready to extend the list to 1,500.
The government has sought to amend the 2009 budget to allocate 300 billion roubles ($10.79 billion) in state guarantees on loans taken by enterprises from the list as well as defence industry firms but economists are not convinced.
"We are looking for a couple of quarters with negative growth in the Russian economy, and the question is whether Russia will have any growth in 2009 in total," said Lars Rasmussen, analyst at Danske Bank in Copenhagen.
The statistics service changed its calculation method for output in 2004, but Anton Stroutchenevski, economist at Troika Dialog, said the contraction was likely the sharpest since the financial crisis a decade ago.
"Now our situation is painfully reminiscent of 1998, when the economy was just falling on these (rouble) devaluation expectations. It started growing again only after they devalued," he said.
VIRTUALLY STOPPED
The news came on a day when Russia allowed the sixth mini-devaluation of the rouble in five weeks, although authorities are still ruling out the possibility of a sharp one-off move in the exchange rate [ID:nLF619070].
"The giving of credits to the economy has virtually stopped, the banking system is not working... No one will give a loan in roubles with these devaluation expectations," Stroutchenevski said.
The government said it had set aside about 9 trillion roubles for support of the banking sector but many banks chose to shift the money into foreign currency instead of issuing loans to stricken industry.
The central bank said it had limited access for 34 banks to collateral-free loan auctions, introduced by the regulator in October to meet the sector's need for liquidity. The banks were seen increasing their foreign currency positions.
The regulator also seeks to appoint representatives to commercial banks, which receive government aid. The envoys will take part in credit committees' meetings to ensure the money trickles into the economy.
Banks have also been allowed to park foreign currency on interest-free accounts in the central bank instead of shifting them abroad -- a measure, which will mask capital outflows and offset a drop in the foreign exchange reserves. -- For a TAKE-A-LOOK on Russian financial crisis [ID:nCRISISRU] -- For a FACTBOX on Russian anti-crisis measures [ID:nLF714085] (Reporting by Toni Vorobyova and Gleb Bryanski)