Russia's gross domestic product (GDP) growth accelerated to 7.4 percent year on year in July, compared with a 6.4 percent rise in July last year, Economy Minister German Gref said on Thursday.
"According to preliminary data, economic growth measured 7.4 percent in July, which allowed us to raise our annual (GDP) growth target to 6.6 percent," Gref told a government meeting. GDP growth was earlier forecast at 6.4 percent for 2006. Russia's rapid economic growth has been fuelled by record high world prices for Russia's booming oil exports.
But while buying up a massive windfall of petrodollars flowing into the economy, the central bank has been issuing rouble cash, which increases inflationary pressures. Russia's monetary authorities have pledged to keep consumer price inflation at under 10 percent this year, and Gref said the target was still feasible.
"In the first week of August, consumer prices grew by 0.1 percent, and there was zero growth in the second week," Gref said. "We are hoping either for zero growth or even slight deflation in August." Gref said inflation was 7.0 percent so far this year.