MOSCOW: The Russian economy contracted 7.9 per cent in 2009 in its worst performance for 15 years, as the economic crisis punished the country for failing to implement crucial reforms, statistics showed.

The gross domestic product (GDP) contraction was the most acute in Russia since 1994, when the economy was still grappling with the chaos of the aftermath of the Soviet collapse. But amid brightening prospects for 2010 the figure was slightly better than predicted by the government, which had been forecasting an even worse contraction of 8.5 per cent.

Economic growth in Russia in 2008 amounted to 5.6 per cent but the economic crisis was by then already slamming the brakes on several years of robust momentum that had been fuelled by soaring energy prices.

Economists have said that Russia has been paying the price for failing to reform and diversify its hydrocarbon-reliant economy during the good times and is still highly vulnerable to oil price shocks.

The crisis had a particularly severe effect on the industrial sector — most notably Russia’’s embattled largest carmaker Avtovaz — prompting fears of social unrest in the worst hit single factory towns.

Among the sectors hardest hit in 2009 was the construction industry, which contracted 16.4 per cent in the period, the statistics office Rosstat said in a statement. The finished goods sector shrank 13.9 per cent. Also badly affected was the hotel and restaurant sector, which shrank 15.4 per cent. A quarterly breakdown was not immediately available.

According to a report

in the Russian business daily Kommersant, the

average price of a hotel room in Moscow fell 36 per cent to $267 a year compared to 2008, the first such decline in years.

President Dmitry Medvedev has in the last months admitted that Russia suffered worse than other countries from the crisis due to the failure of the authorities to change its economic model over the last years.

He has called for the country to embrace

far-reaching economic reform over the next years but analysts have criticised him for being long on rhetoric and short on concrete actions.