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. Last Updated: 07/27/2016

Statistics Chief Unveils Rosy Figures

The nation's industrial output was up 8.6 percent in the first half of this year compared to the same period last year, as the economy continued its recovery from the 1998 crisis, State Statistics Committee head Vladimir Sokolin said Monday.

Gross domestic product was up 8.4 percent for January to March, he said.

"Almost all the figures are positive except for a few like the unemployment rate," Sokolin said at a news conference where he presented the nation's vital statistics for the first half of 2000.

Sokolin was upbeat on inflation, admitting June's 2.6 percent month-on-month rise in inflation was higher than expected, but attributing it to pent-up inflationary factors being released after the presidential elections. Around election time governors tended to hold prices such as rents prices, while after pollsnominal wages are raised, he said.

He forecast inflation for July at roughly 2 percent and said annual inflation could be kept within the government's estimate of 18 percent, depending largely on farm output, a factor that has led to deflation twice recently.

But Andrei Abramov, an economist at NIKoil brokerage, disagreed. He said the 18 percent inflation target could still be achieved, but inflation was growing more through increased money flows as cash generated in flourishing parts of the economy spread. This, and not the harvest, will determine whether or not the current budget target is real, Abramov said.

Sokolin reported healthy profits for businesses in the first five months of the year with net profits totaling 405.81 billion rubles ($14.6 billion), 2.4 times higher in ruble terms and 1.7 times in dollar terms compared with the same period last year.

A survey of the 2000 largest companies showed a sharp rise in cash payments as opposed to barter and payments from 33 percent in fall 1998 to 67 percent in May 2000, he said.

Investments in equipment were up by 14.3 percent year-on-year for January-June, which may be seen as rather modest, but they are subject to seasonal changes declining at the beginning and rising at the end of the year, Sokolin said.

Investment in chemical products was down 5.3 percent in June compared with May due to a seasonal drop in demand for fertilizers, he said. Low internal demand had even led to some products, such as gasoline, finding their way to the U.S. market due to the much higher export prices, Sokolin added.

Natalya Orlova, an economist at Alfa Bank, said in a telephone interview that companies are slowing production investment as they invested heavily in the winter and no longer have any free funds.

Asked about foreign investors, Sokolin said they are easy to frighten and difficult to lure back and that many new foreign investments are only nominally foreign ones as they originate from nations such as Cyprus and Nauru, where Russians wary of the taxman and the ruble have stashed their wealth.

There was an average of 8.5 million people unemployed in April to June, or 5.5 percent fewer than at the same time last year, he said. This represents 11.5 percent of the nation's working age population of 73.6 million.

Wage arrears total 39.27 billion rubles ($1.4 billion) while the average nominal June wage was 2,300 rubles ($82.50), Sokolin said.