Government Cuts Economic Growth Forecast

The government cut its forecast for economic growth this year after the global credit squeeze hurt manufacturers and slowed investments.

The economy will probably expand between 6.8 percent and 7 percent this year, less than the previous estimate of 7.3 percent, the Economic Development Ministry said Monday. The ministry last lowered its forecast at the end of October from a rate of 7.8 percent.

"The negative influence of the growing global financial crisis on the real economy intensified" in October, the ministry said.

The economy expanded an annual 5.9 percent in October, bringing growth in the first 10 months to 7.5 percent, it added, citing preliminary calculations.

Manufacturing slowed in October and would evidently continue to do so in November and December, it said.

"The real sector slowed in response to limited access to loans and reduced demand and investment," the report said.

The country's trade surplus fell by half last month to $7.9 billion, Interfax reported, citing a source.

Exports rose 2 percent, compared with October 2007, to $35.5 billion while imports advanced 24 percent to $27.6 billion, it said.