Economic Growth Rate Slows in Q2

The economy expanded at a slower pace in the second quarter as lower investment and the strong ruble hurt domestic producers, the State Statistics Service said Wednesday.

Gross domestic product grew 7.5 percent, compared with 8.5 percent in the previous three-month period, it said.

The figure is not seasonally adjusted. The economy grew 8.1 percent in the second quarter of 2007.

"Lower capital inflows have already played a role. Their effect on growth will be felt more in the coming months," said Yaroslav Lissovolik, chief economist at Deutsche Bank in Moscow.

"High raw materials prices, high salaries" and other rising costs for companies also slowed expansion, he said.