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Russia's 2011 GDP growth to reach 4.3% in 2011 - IMF

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This summer's abnormal heat and drought will slow Russia's economic growth to 3.7% in 2010 but it will rise to 4.3% next year, the International Monetary Fund (IMF) said on Thursday.

This summer's abnormal heat and drought will slow Russia's economic growth to 3.7% in 2010 but it will rise to 4.3% next year, the International Monetary Fund (IMF) said on Thursday.

"We have examined the economic situation in Russia and noted a temporary slowdown of growth due to what happened in summer - drought and heat, but the slowdown is temporary. We forecast GDP growth at 3.7% this year and 4.3% in 2011," Deputy Director of the IMF's European Department Juha Kahonen told a news conference.

The Russian government expects GDP to expand 4.2% in 2011.

The IMF also expects Russia's 2010 budget deficit to amount to 4.6% of GDP and 4% of GDP in 2011.

"We expect a 4.6% of GDP deficit and 4% next year. Russia pays too much attention to the overall deficit figure, which depends on oil price fluctuations, but it should pay more attention to non-oil deficit," he said, adding that Russia's non-oil deficit in 2010 would stand at 13% compared with a 4.7% long-term target.

Kahonen said that Russia needed more detailed measures to cut the budget deficit and support economic growth.

"The budget deficit cuts planned for 2011 are a step in a right direction but it is necessary to speed the cuts up in the next few years to achieve a long-term target of non-oil budget deficit of 4.7% of GDP in 2015," he said.

Food price growth would boost 2010 inflation to 8.5%, he said.

"Although the recent price jump was mainly due to food price rises because of the drought, non-food prices also grew permanently in July. Inflation may stand at 8.5% in 2010 and if there are no policy changes will remain high with a great probability," he said.

The government expects 2010 inflation at 8.4%.

MOSCOW, December 9 (RIA Novosti)

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