"Past sources of growth, primarily accelerated oil exports, have practically worked themselves out. We have been talking about it, but this year we have faced this problem in reality," Gref said, adding that economic growth in 2005 has slowed down year-on-year.
According to Gref, the GDP grew 5.6 % in the first half of 2005, a 2.1 % drop from the same period last year, and the industrial production index declined from 7.3 % in the first half of 2004 to 4 % in 2005.
Gref said that given such a positive trend, the ministry upgraded the economic growth forecast for the year's end to 5.9 %.
He said, however, that the economic growth in the second quarter was unstable, except for the telecommunications sector. Greff noted the drop in engineering production, particularly of military goods.
"If in the near future there is no significant progress in engineering, we will not be able to prevent the strengthening of the ruble and the shakeout of homemade products from the domestic market," he said. .