Mr. Zhukov reported that Russia’s economic growth had been stable in the first half of this year. In particular, the GDP advanced by 7.4 percent in comparison to the first half of 2004, investments in fixed assets increased by 12.6 percent, the real incomes of the public gained 0.8 percent, inflation reached 6.1 percent.

According to the Deputy Prime Minister, the quality of Russia’s economy growth has changed considerably. On the one hand, positive indicators of economic growth were determined by a favorable foreign economic environment and on the other hand, the quality of economic growth has changed “primarily thanks to domestic development sources.”

The pace of the development was the fastest in the machine building and metalworking industries in the first half of this year, Mr. Zhukov reported. For example, labor efficiency increased by 1.5 percent in the machine building industry, he pointed out.

At the same time, the Deputy Prime Minister said that the situation was not the same in all branches of Russia’s economy. Among negative trends he drew attention to a faster pace of growth in imports in comparison to exports and an increase in the income difference between various groups of the public.

According to Mr. Zhukov, an analysis of the macroeconomic indicators for the first half of this year will be included in the package of documents that the government will submit to the State Duma during consideration of the federal budget for 2005.

In his turn, Russian Economy Minister German Gref reported that the ministry had increased its forecast for Russia’s economic growth in 2005 from 5.9 percent to 6 percent. “Under the present pace of growth in prices for domestic goods, we have decided to raise the forecast for economic growth for the next year.” According to estimates made by experts with the Economy Ministry, the GDP will advance by 6.7 percent in 2004.

According to Gref, a tendency for the GDP to grow will continue. He stressed that it was very important to take all the measures that the government had planned for the medium term in order to preserve this tendency.

In addition, Gref expressed his certainty that the government would manage to keep the inflation rate at 10 percent in 2004 as it had been planned. According to him, seasonally adjusted underlying inflation amounted to 4.3 percent in the first half of 2004. Inflation was dropping primarily in the first quarter of 2004 and stopped decreasing in the middle of this year. There might be inflation risks in the second half of 2004, the minister said. A lot will depend on whether deflation will take place this summer, Gref pointed out.