Industrial output fell by a record 16.9 percent year on year in April, far more than was expected, boosting economists' fears that Russia is entering a new phase of the financial crisis.

The data, released on Monday, showed that the manufacturing sector was hardest hit, falling 25.1 percent year on year. Russia, the world's second-largest oil exporter, suffered from a slump in commodity prices last year and may take some time to recover.

"[The data] shows that the Russian economy is not going to stabilize in the second quarter, unlike the economies of other BRIC countries," said Danske Bank senior analyst Lars Rasmussen, referring to Russian peers Brazil, India and China.

Russia pulled itself back from a brink of collapse last year, performing a gradual devaluation of its currency and injecting billions of dollars into industry and the banking sector, but the economy remains paralyzed by the credit crunch.

Billions of dollars in state aid remain stuck in commercial banks since enterprises cannot afford to pay high interest rates charged by lenders on their loans to reflect the elevated risk level in the economy.

"April data suggests there is no reason for optimism on the state of our economy," said economist Yevsei Gurvich, head of EEG think tank. "It creates a risk that a second phase of the downturn cannot be ruled out."

The Central Bank, which is under pressure to ease credit conditions, cut official interest rates twice in recent weeks and signaled more cuts despite inflation remaining in double digits. Officials have said the economic situation was stabilizing.

"Today's data signals very weak labor market data," said Rasmussen. Many analysts will also be watching the next jobless data as a measure of domestic political risks, although public discontent with the anti-crisis policy remains subdued.

The State Statistical Service did not release its monthly jobless numbers for March, publishing quarterly data instead, a move seen by some analysts as an attempt to gloss over unpleasant information.

The service did not explain the move, and an absence of the monthly data for April will further undermine analysts' view on stabilization of the Russian economy.

Monday's record fall in industrial production compared to a 13.7 percent year on year decline in March. The previous contraction record in the series' seven-year history was set in January, when output fell by 16 percent.

"The search for the bottom is still on. In May, we may see an even lower number," said Trust Bank chief economist Yevgeny Nadorshin. "Problems in heavy industries, cuts in investment plans remain."

On a brighter note, Russian wage arrears, a gauge of corporate stress and a trigger for popular protests in Russia's last economic crisis in 1998, fell 9.5 percent in April, retreating from a three-year high that was reached in March.