Russian GDP grows 2.5% in July
MOSCOW. Aug 24 (Interfax) - Russia's GDP, the Economic Development Ministry estimates, grew 2.5% year-on-year in the month of July, Deputy Economic Development Minister Andrei Klepach said at a Tuesday briefing.
GDP expanded 3.8% year-on-year in the period January-July.
However, considering seasonal and calendar elements of July GDP, it contracted 0.3% from June after expanding 0.3 in June from May, the ministry reckons.
The main reason for the drop in GDP, according toe Klepach, has been declining industrial output (including seasonal factors) by 0.8% as of June, including a decrease in manufacturing coming to 1.2%.
Klepach said that the bulk of the decline had been felt in machine-building, the production of transport vehicles, construction materials and food output.
In addition, he said that construction operations continued to decrease in July by 1.6% in comparison in June and bearing in mind seasonal factors.
Furthermore, Klepach said that substantial decreases had been posted in the agricultural sector. Factoring seasonal factors, the decrease in July came to 3.3% in comparison with June. "So, the draught did serve as an macroeconomic factor, which was felt in agricultural operations and on industrial since several types of production in July halted operations owing to anomalously high temperatures," Klepach stressed.
However, the economic slowdown has not been driven by the draught as much as weak investment demand. Klepach stressed that investment (bearing in mind seasonal factors) decreased by 2% in July in comparison with June and went up in annual terms by only 0.8%.
"Therefore, the heat of the matter is weak and lagging investment demand is ongoing and is a significant barrier," Klepach said. Nonetheless, he expressed hope that investment demand could revive by year's end owing to both state injections to the economy and energy companies' investment plans.