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. Last Updated: 07/27/2016

Manufacturing Slows After July Peak

Manufacturing activity growth slowed in August from a 21-month high reached last month, a Purchasing Managers Index showed.

Moscow Narodny Bank's seasonally adjusted Purchasing Managers Index, based on a poll of 300 Russian purchasing managers, fell to 53.7 in August from a 21-month high of 54.1 reached in July, the bank said in a statement. A PMI reading of above 50 indicates the manufacturing economy is generally expanding, while an index below 50 indicates a general decline.

"While the economy is vulnerable to any deterioration in global oil prices, the robustness of output performance suggests favorable rates of growth over the near term," said the statement.

The economy is set to grow by 5.9 percent this year, according to Economic Development and Trade Ministry forecasts, as companies like Yukos and LUKoil, its top oil producers, boost exports and reinvest the proceeds, propping up demand for machinery and consumer goods.

Russia extracts and exports more oil than any country except Saudi Arabia.

"There remain, however, constraints on this performance, in particular limited investment flows and lack of access to working capital," the bank said.