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Investment in Russia falls 7%, economic outlook weak
February 20, 2014, 12:03 pm

Russian officials had earlier warned the outlook remains weak for this quarter [AP]

Russian officials had earlier warned the outlook remains weak for this quarter [AP]

New data released by Russian statistics agency Rosstat shows a worrying slump in investment by Russian companies which fell 7 per cent last month as compared with January 2012.

Russian officials had earlier warned the outlook remains weak for this quarter.

A Reuters poll of analysts had predicted a 0.5 per cent rise in investment, largely due to a boost from preparations for the Sochi Olympics.

Russia grew 1.3 per cent last year with the $2 trillion economy decelerating for a fourth year.

Russia’s Economy Ministry forecasts a 2.5 per cent growth this year although most experts remain cynical.

Economy Minister Alexei Ulyukayev said on January 29 that Russia is struggling amid meager growth in investment.

With Russia’s natural-resource dependent economy slowing, the Kremlin has already signaled that it would have to cut spending.

In a meeting with an expert panel of economists on Wednesday, President Vladimir Putin said “the government is currently preparing a long-term forecast for the nation’s socioeconomic development through 2030”.

Russia has been attempting to wean itself off its chronic dependence on natural resources. The world’s largest oil and gas producer, has in recent years launched many initiatives to reduce its over-reliance on commodities by promoting alternative sectors.

President Vladimir Putin had conceded in December that “the main reasons for the economic slowdown are not external but internal”.

The Russian economy is ranked by the World Bank as the fifth biggest in the world by purchasing power parity.

 

TBP and Agencies

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