The GDP is expected to grow 6.5 percent in 2004 (down from 7.3 percent in 2003), and industrial production is expected to increase 6.1 percent (down from 7 percent last year). Lower expectations for economic growth in the second half of 2004 are due to the fact that the Russian economy grew more rapidly in the second half of 2003.

According to the Economy Ministry, inflation will be 0.5 percent in Russia in May 2004, and 5.1 percent – in January-May 2004. In the estimation of the Statistics Service, inflation was 4.6 percent in January-April. The inflation slowdown was due to a restricted rise in natural monopoly prices and tariffs, and the strengthening of the ruble.

In the estimation of the Economy Ministry, fixed investment increased to RUR 574.6bn (about $19.8bn) in January-April 2004, 12.9 percent more than in the same period last year. A rise in investment is due to high oil and gas prices, which boosted investment in the fuel and energy sector; lower yields on ruble instruments, stimulating investors to invest in the real sector of the economy; the improving financial position of Russian companies, and overall economic stability in the country.

The trade surplus was $24.3bn in January-April 2004, which is 25 percent more than in the corresponding period last year ($19.3bn).