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. Last Updated: 07/27/2016

Business in Brief

S&P: 2.5% Growth

The Moscow Times

Rating agency Standard & Poor's forecasts 2.5 percent growth in gross domestic product in 2001 and 2002, Prime-Tass reported S&P as saying Thursday.

Speaking at a news conference, Cynthia Stone, director of S&P's Russia office, said the agency forecasts a 7 percent to 8 percent increase in investment this year. The figure may drop to between 4 percent and 5 percent next year. S&P forecasts a moderate investment growth in small businesses.

The ratings agency also said foreign direct investment was around $3 billion last year, with portfolio investment being insignificant.

State: 4% Growth

The Moscow Times

The Economic Development and Trade Ministry said Thursday that gross domestic product increased 4.2 percent year-on-year in the first quarter of 2001, Interfax reported.

GDP will go up 4 percent in 2001, the ministry predicted in a report on first-quarter results and full-year forecasts.

Inflation is now forecast at 14 percent to 16 percent, rather than the 12 percent written into the federal budget. Inflation was 7.1 percent in the first quarter.

IMF: 4% Growth


WASHINGTON — Russia's economic growth will slow significantly this year as lower oil prices, the global slowdown and the real appreciation of the ruble take their toll, the International Monetary Fund said Thursday.

In its World Economic Outlook report, the IMF said growth will fall to 4 percent this year and next from 7.5 percent in 2000.

The general government surplus is also expected to decline sharply, reflecting lower tax receipts from oil, revenue loss from implementing tax reform and additional expenditures that follow from spending cuts in recent years.

But the IMF expects the external position to remain strong. This will require the Central Bank to sterilize its foreign exchange interventions, the report said.

Ministry: Trade Balance

The Moscow Times

The Energy Ministry said Thursday that Russia reduced its favorable trade balance for the January to March quarter by 7.6 percent compared with the same period last year to $14.5 billion, Prime-Tass reported.

According to tentative data, the ministry said first-quarter exports totaled $25.3 billion compared with $24.3 billion a year ago, while imports totaled $10.8 billion in the first quarter compared with $10 billion last year.

According to the ministry, exports in March totaled $9.1 billion, while imports reached $4.1 billion.

Putin on Rail Reform

The Moscow Times

President Vladimir Putin on Thursday said the main goals of railway reform were increased efficiency and effective state regulation of the industry, Prime-Tass reported.

Putin urged Economic Development and Trade Minister German Gref and Railways Minister Nikolai Aksyonenko to "create a single tariff for all carriers."

Putin stressed the need to get rid of cross subsidies, when either transport sucks out resources from the economy or vice versa.

"This is not an easy problem, and it requires a systemic approach. There must be no sharp movements here," he said.

Putin singled-out the Trans-Siberian Railway for criticism. "The Railways Ministry has invested about $1 billion in this railway. It has huge advantages for the transportation of cargoes between Asia and Europe, but cannot compete," he said.

Stepashin Touts Club

The Moscow Times

Audit Chamber head Sergei Stepashin told an investment conference in London on Thursday that he wants to create an informal club to support foreign investors that would allow them to meet with federal and regional authorities, businessmen and bankers, Interfax reported.

Stepashin said the chamber, the State Duma's budgetary watchdog, is ready to provide informational support to potential investors and give recommendations on choosing investment strategies.

"In some cases the Audit Chamber could take charge of the implementation of specific investment projects and manage their progress," Interfax quoted him as saying.

Irkutskenergo Spat

The Moscow Times

The Prosecutor General's Office ordered the Irkutsk regional administration to hand the Property Ministry a 15.5 percent stake in the Irkutskenergo utility and strip the company registrar Irkutsk Stock Market Agency of its license, company director Vasily Boiko told Ekho Moskvy radio Thursday.

The fight for the 15.5 percent stake in Irkutskenergo has heated up in recent days as the extraordinary shareholders meeting is scheduled for Sunday.

If the federal government does not vote at the meeting, the company may end up in the hands of Siberian Aluminum and Siberian-Urals Aluminum Co., which apparently have cut a deal with the regional administration to support their bid for the power producer.

SUAL Ups Production

The Moscow Times

The Siberia-Urals Aluminum holding increased production of primary aluminum by 1 percent to 145,980 tons in the first quarter of this year as compared with the same period last year, Prime-Tass reported the company as saying Thursday.

SUAL said in a press release that production of raw aluminum increased 1 percent to 144,650 tons and of alumina by 2 percent to 410,500 tons.

In the first quarter, all divisions managed by SUAL showed stable growth in the output of basic items at a level between 4 percent and 5 percent a year, while the world aluminum industry grows by 2 percent, the company said.

'Ruble at 30 Per Dollar'


The ruble will be traded at around 30 per dollar this year, in line with the budget target, Interfax reported a Central Bank official as saying Thursday.

"I think we shall manage to do so because last year inflation was at around 20 percent, but the dollar rate grew much slower," Deputy Central Bank Chairman Viktor Melnikov told an investment seminar.

Since the start of this year, the nominal ruble rate has fallen to 28.86 per dollar from around 28.50 per dollar at the start of the year, while consumer prices have risen 7.1 percent.

Reserves Up 1.32%

The Moscow Times

Gold and foreign exchange reserves rose by 1.32 percent, or $400 million, in the week to April 20, Prime-Tass reported.

Reserves rose to a high of $30.8 billion from $30.4 billion, the Central Bank said in a report Thursday.

Central Bank Chairman Viktor Gerashchenko said at the April 11 Congress of the Association of Russian Banks that optimal gold-exchange reserves are $45 billion.