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. Last Updated: 07/27/2016

Economy Expanded 7.2% in First Half

Economic Development and Trade Minister German Gref said Tuesday that the country's gross domestic product rose by 7.2 percent year on year in the first half of 2003, compared to 3.6 percent growth in the same period last year.

"We have calculated GDP figures today and growth was 7.2 percent in the January-June period," television showed Gref telling President Vladimir Putin, who has set an ambitious target to double the size of the economy within 10 years.

Gref's ministry had said it would review its official full-year 2003 GDP growth forecast of 4.6 percent after data for the first six months became available.

Russia, the world's second largest crude oil exporter, had been aiming for 3.5 percent to 4.4 percent GDP growth in 2003 depending on global crude prices, but in May ministry officials raised their forecast after a strong start to the year.

Last month, Prime Minister Mikhail Kasyanov -- under pressure from the Kremlin to speed economic growth -- made an even higher forecast of 5.5 percent GDP growth for the whole year.

According to official statistics, GDP rose by 4.3 percent in 2002, marking the fourth straight year of growth but also a slowdown from figures of 9 percent in 2000 and 5 percent in 2001.

Gref also said industrial production, unadjusted for vacation days, grew by 6.8 percent in January to June.

Output rose 6 percent in the first quarter and 3.9 percent in the second quarter, when adjusted for the number of working days, the State Statistics Committee said in a statement faxed to news services.

In June, industrial production grew 5.3 percent from the same month last year, after growing 8.5 percent in May from the same month a year ago, when adjusted for the number of working days, the committee said.

Unadjusted output grew 7 percent in the month and 6.8 percent in the first six months.

Last year industrial production grew 3.7 percent.

Investment in the economy rose by 11.9 percent in the first six months, agencies quoted Gref as saying in the meeting.

Gref also said he expected investment to slow down in the second half of the year but to show a healthy rise of 9 percent in full-year 2003. Investments rose 2.6 percent last year.

The Economic Development and Trade ministry had said that faster-than-expected growth this year would stem from a strong performance by the industrial and services sector, healthy domestic demand and robust exports.

Economists' estimates for Russia's GDP growth this year range from 4.5 to more than 6 percent thanks to high global crude oil and commodities prices as well as rising investment.

(Reuters, Bloomberg, AP, MT)