The Russian government revised down its forecast for 2004 industrial output growth on Tuesday after a sharp slowdown in September and said inflation would overshoot its year-end target.
Andrei Klepach, head of forecasting at the Economy Ministry, cut the outlook for industrial output growth to 6.5-6.7 percent from an earlier 7.1 percent.
"We believe we will overcome the pause in growth in the fourth quarter," Klepach told a news conference. "But, on the other hand, we are unlikely to meet our base forecast."
He said inflation would end the year at 10.5 percent in a best case - above a government target of 10 percent - but ruled out "apocalyptic scenarios" of 11 or 12 percent.
Economists say the determination of Russia's monetary authorities to cap the rouble through dollar-buying intervention - effectively printing roubles - has put the 2004 price growth target out of reach.
The central bank has yielded to market pressure, allowing the rouble to rise by 1.8 percent over the past two weeks but economists say that move comes to late to nip price pressures in the bud.
Russia's economy slowed sharply in September, despite record oil revenues being earned by the world's number two oil exporter. Year-on-year growth in gross domestic product in September was 4.3 percent, compared to 6.9 percent in the first nine months.
Economists say the economy has hit capacity constraints after years of fast growth, while a banking crisis and the woes of oil major YUKOS - which faces break-up after failing to pay massive tax bills - have hurt investment.
President Vladimir Putin grilled policy makers on Monday, telling them to analyse Russia's latest economic difficulties and come up with answers.
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