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Russia’s GDP shows growth of more than 1% in January-May

June 25, 2014, 15:27 UTC+3 MOSCOW
It may grow at the same pace for the whole year 2014, according to Economic Development Minister Alexei Ulyukayev
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© ITAR-TASS/Alexei Filippov

MOSCOW, June 25. /ITAR-TASS/. Russia’s gross domestic product (GDP) grew 1.1% in January-May and may grow at the same pace in the whole of in 2014, Economic Development Minister Alexei Ulyukayev told PRIME in an interview on Wednesday.

“Our GDP growth amounts to 1.1% in five months. This is our estimate. To get an annual growth of 0.5% we need to have a zero growth for the rest of the year, and we have no reason for this. That is why I would hold the idea of the five month growth trend maintaining through the year as realistic,” he said.

According to the Federal Statistics Service, Russia’s GDP grew to 0.9% in January-March. Previously the ministry expected Russia’s economy to grow 0.5% in 2014, and, according to its 2014-2017 forecast, expected annual GDP to grow 0.9% in April-June and then slow down to 0.1% for the rest of the year.

In addition, Ulyukayev said that cancelling the decreasing coefficient of the households’ tariffs indexation in 2015 will add up to 0.1% point to inflation.

“The cancelling of the coefficient cannot drastically change the inflation dynamics. The tariff contribution to the inflation is less than 10%. Changing the coefficient to 1 from 0.7 means an increase of slightly more than 1 percentage point. 10% from one is 0.1 percentage point. This is the maximum influence on inflation,” he said.

The decision to cancel the coefficient was made to “not increase cross-subsidization.” The maximum amount of the households’ tariffs increase will be the same as for the industrial customers — last year’s forecasted inflation, the minister added.

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