MOSCOW, June 4, 2009 (AFP) - Russia's economy will only start to recover from the crisis by the end of this year or the start of 2010 amid declining consumer demand and investment, a minister was quoted as saying Thursday.

Economic Development Minister Elvira Nabiullina confirmed her ministry was predicting a contraction in the Russian economy this year of between six and eight percent, one of the most pessimistic forecasts from any body.

"We hope that there will be a recovery of our economy by the end of this year or the start of next year," she told the Vedomosti newspaper in an interview to coincide with Russia's annual economic forum in Saint Petersburg.

"There is some talk that there is a recovery now in the world economy... but there is no unambiguous understanding of how stable this is. The risks remain for the world economy and we are dependent on it," she added.

Russia's economy, dependent on exports of hydrocarbons and raw materials, has been hit badly by the economic slowdown although the government has fought hard to prevent any repeat of the 1998 crisis when it defaulted on debt.

Nabiullina said the forecast of a 6-8 percent contraction in GDP in 2009 compared with 2008 was justified given the economy had contracted 9.5 percent in the first quarter year-on-year.

Not only was the global slowdown deeper than originally forecast but Russian consumer demand and investment volumes had "fallen by more than we expected", Nabiullina admitted.

Yet she expressed optimism that Russia would not suffer a second crisis wave owing to the bad debts of banks "even though we have to be ready for any possible development in the situation".

Nabiullina also denied that help given by state banks to struggling companies would herald an increase in state-ownership of the economy.

The Saint Petersburg Economic Forum which kicks off later Thursday is Russia's premier economic event and is set to be attended by a roll-call of its main economic players.