Russia grows 4.0 percent as economy recovers from crisis

31st August 2010, Comments 0 comments

Russia's economy grew 4.0 percent in the first half of the year, continuing its recovery from the global crisis, but this was slightly below official forecasts, data showed on Tuesday.

The figures from the state statistics office were below mid-July estimates for growth of 4.2 percent in the first half, according to the economic development ministry.

The data showed industrial output up 9.6 percent in the January-July period compared with a year earlier as the country recovered from a severe slowdown sparked by the global economic crisis.

This year, the economy has been hit by the worst drought in decades, with many industrial companies shutting shop or cutting shifts as wildfires raged in western Russia, engulfing Moscow in a hazardous smog.

Economic Development Deputy Minister Andrei Klepach said earlier this month that the drought would cut at least 0.7-0.8 percentage points from 2010 growth as Russian harvests were hurt by the extreme temperatures.

The drought has destroyed one quarter of Russia's crops, leading the government to slap a blanket ban on grain exports.

Last year, Russia's hydrocarbon-dependent economy was hard hit by the economic crisis, suffering a 7.9-percent economic contraction after growth of 5.6 percent in 2008.

But with the recovery of energy prices and a strong performance in the second quarter, the government forecast growth of 4.0 percent for all of 2010.

Earlier this month, the International Monetary Fund put this year's growth at 4.25 percent and 2011 at 4.0 percent.

© 2010 AFP

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