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Russia's economics ministry raises Urals oil price forecast to $86

MOSCOW, March 24 (RIA Novosti) - Russia's economics ministry raised on Monday its 2008 forecast for the annual average price of Urals oil, a benchmark blend, by 16% to $86 per barrel, a high-ranking ministry official said.

"The oil price is rising. The average price will be approximately at the level of $86 per barrel. However, in the second half of the year, prices will go down," Gennady Kuranov, director of the ministry's macroeconomic forecasting department, said.

The ministry earlier raised its Urals forecast for the year in late January, from $56 to $74. In 2006 the annual average price for the Urals oil was $61 per barrel.

The Russian economics ministry also raised its 2008 inflation and GDP growth forecasts from 8.5% to 9.5% and from 6.7% to 7.1%, respectively.

The official said the better GDP growth forecast was caused by growing oil prices, an influx of investment and an increase in trade turnover.

"Oil prices give an impetus to investment growth," Kuranov said.

However, Kuranov said the forecasts were a result of the ministry's proposal, while the final decision to review earlier forecasts would be made by the government's budget commission at a meeting on Friday.

According to the Russian Statistics Service's preliminary calculations, the country's economy grew 8.1% last year.

Inflation in Russia stood at 11.9% in 2007. The government's initial target of 8% for last year was defeated by rising food and oil prices.

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