Russia Warns of New 2013 Growth Downgrade

Russia's economy minister warned on Wednesday that officials will probably have to downgrade the 2013 growth forecast for the second time in months because of a poor first-half performance.

The Federal State Statistics Service reported on August 9 that Russia's economy expanded by just 1.4 percent of gross domestic product compared to the first six months of 2012.

The result fell far short of President Vladimir Putin's promise of five-percent growth for the year and the government's own downwardly revised forecast of 2.4 percent.

Economy Minister Alexei Ulyukayev said the "likelihood was high" that a new negative revision of the figure would be made soon.

"Not by a lot, but the likelihood of a review is high," Interfax quoted Ulyukayev as saying.

Russia's Deputy Economic Development Minister Andrei Klepach had also admitted on Tuesday that "it does not look like we are going to make 2.4 percent."

Russia experienced average annual growth of more than seven percent during Putin's first two terms as president in 2000-2008 thank to soaring global prices for the country's energy and other commodity exports.

The country's economy imploded during the 2008-2009 global financial crisis and has been unable to achieve annual growth of more than five percent since.

The London-based Capital Economics consultancy estimates that Russia is already in a recession -- defined as two consecutive quarters of negative quarter-on-quarter growth -- based on the January-June figures.

Fitch Ratings said last week that the slowdown "had highlighted structural economic issues and a lack of growth-enhancing reforms."

Some officials have blamed the slump on external factors such as the recent recession in Europe -- Russia's largest trading partner.

But former deputy central bank chief Sergei Aleksashenko wrote in an editorial in the Vedomosti business daily that "the talk about a negative external environment is untrue."

He pointed out that hydrocarbons account for half of Russia's exports and that the price of light sweet crude in New York had recently approached $110 a barrel.