Growth slows in second quarter
GDP expands 3.7%, down from 4.1% in first three months of 2011
Moscow: Russia's economy slowed in the second quarter, according to Deputy Economy Minister Andrei Klepach, who expects growth to accelerate in the final six months of 2011.
Gross domestic product expanded 3.7 per cent from a year earlier in the March-June period, less than the 4.1 per cent growth in the first three months of 2011, Klepach said.
"We expect a pickup in growth in the second half, in part thanks to demand-driven investment," Klepach said. Agricultural output will also help growth accelerate after the worst drought in at last half a century in 2010 hurt harvests.
Consumer demand
Russia is lagging behind growth in emerging-market peers Brazil, India and China, even as prices for the commodities it exports rise. The economy grew 3.9 per cent in the first half from a year earlier, slower than the government's 4.2 per cent forecast for the whole of 2011. Consumer demand is beginning to recover as inflation eases, boosting household spending power, Klepach said.
The central bank is seeking to bring 2011 inflation down to 7 per cent, which would be the lowest annual rate since the collapse of the Soviet Union in 1991. The government maintains its 6.5 per cent-7.5 per cent forecast for price growth.
"At present, we're headed for nearer the lower end, but that doesn't mean we're going to get 6.5 per cent," he said. "There's always a chance inflation will accelerate in the fall."
