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GDP growth rates will be at least seven percent this year
GDP growth rates will be at least seven percent this year, while growth rates of industry will hit the same figure by the year-end. This forecast was made by vice-premier Alexander Zhukov on Tuesday at the international forum “New business to new Russia”. He emphasised that the quality of economic growth in Russia changed mostly thanks to active growth in the processing industry, which amounted to 10-12 percent since the start of the year. According to his data, commodity sectors are rising at a lower pace. Zhukov called attention to a rise in domestic demand and purchasing power of population. Housing construction jumped up by 40 percent as against the first half of last year. The capital inflow to Russia totalled 67 billion US dollars in the first half of 2007. Zhukov noted that funds are now invested in the development of the car industry, both in assembly and production, as well as in the power industry. Investments into Russian industry «are made sometimes despite the will of the governments of countries, which recommend their companies against investing money in Russian production”. However, business, forecasting its profits, continues to build production facilities in Russia. Zhukov expressed regret that inflation rates are now catching up with the level of last year due to a high capital inflow. He hopes that this year’s inflation will be kept under eight percent. “In future, we intend to beat it down to five percent annually, which will help to offer cheaper credits,” the vice-premier noted. Speaking of the macro-economic policy as a whole, Zhukov claimed it inadmissible “to yield to populist slogans during the coming elections and to use accumulated reserves in this period”. Russia’s policy on economic development was, on the whole, one of the main factors for the choice of Sochi as the place for the 2014 Winter Olympic Games. According to Zhukov, IOC members expressed trust and pointed to the correct economic policy, conducted by the country. In future, the vice-premier intends to accentuate the anti-monopoly policy and development of competition, including among small and medium businesses. He is sure that administrative regulations, now being drafted in all spheres of executive power, will help to cut corruption in bureaucratic procedures.
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