Zee Beam News

Russia's GDP is expected to grow 6 percent in 2005, according to Andrei Klepach, director of the economy ministry's department for macroeconomic forecasting. He said the economy ministry's official forecast for Russia's GDP growth in 2005 was 5.8 percent, while a 6.3 percent growth was set in the budget. Klepach commented that 5.8 to 6 percent was a more realistic forecast, with oil prices expected to decline slightly this year. If the government wanted to meet its 6.3 percent goal, it would have to review all of its macroeconomic figures, Klepach stressed. Earlier, Russian economy minister German Gref said GDP growth could drop to 4.5 percent in 2005 unless Russian companies became more competitive. According to provisional figures, the country's GDP grew 6.9 percent in 2004. The official figure for 2003 is 7.3 percent. Klepach said Russia's GDP growth in 2004 could be more than 6.9 percent, noting that the final figures would be presented by the Federal Service for State Statistics of the Russian Federation in the first quarter of 2005. In general, Klepach commented, Russia's economic development became more consumer-oriented in 2004. Last year's economic growth was not solely due to foreign trade factors. "These factors account for only 50 percent of GDP growth, the rest we achieved ourselves," I mean Russian business and economic authorities," he said. The highest growth rates were reported in the second quarter of 2004, but the economy slowed down in the following quarter. In the first quarter of last year, Russia's GDP grew 7.5 percent, in the 2nd quarter - 7.4 percent, in the 3rd quarter - 6.4 percent, and in the 4th quarter - 6.3 percent. Klepach also said inflation could rise above the planned 8.5 percent in 2005. "Given high inflation in January, it will be difficult to meet an 8.5 percent target," he noted. According to Klepach, the government was not going to review the target because "a significant rise in inflation" was over. At the same time, he did not give January's inflation figures. Russian finance minister said earlier that inflation would be around 2.1 percent in January 2005. Vladislav Sokolin, head of the statistics service, predicts inflation between 2.3 percent and 2.5 percent.