Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Costly Oil Slows GDP to 4.1%

Economic growth slowed in the first quarter as corporate investment stagnated and the biggest quarterly gain in oil prices for two years failed to offset $21.3 billion of capital outflows.

Gross domestic product rose 4.1 percent from a year earlier after increasing 4.5 percent in the previous three months. The median estimate in a Bloomberg survey of 15 economists was 4.2 percent. The Economic Development Ministry estimated growth at 4.5 percent, and Prime Minister Vladimir Putin put it at 4.4 percent.

President Dmitry Medvedev seeks to boost growth to 10 percent within five years to match the pace of the fastest-growing developing economies. Capital flight and slowing domestic demand restrained economic output even as commodity prices rose, stoked by unrest in the Middle East, which produces about 35 percent of the world's oil.

"The economy hasn't reached a phase of sustainable recovery," Kirill Rogov, an economist on one of the panels reviewing the government's Strategy 2020 for Putin, said in an interview before Monday's release. "We are seeing capital outflows despite growing oil prices."

Net outflow of capital totaled $21.3 billion in the first quarter and $38.3 billion in 2010, more than the Central Bank's forecast of $22 billion. That compared with $56.9 billion a year earlier, Central Bank data show. The country last had a net inflow in 2007, when it reached $81.7 billion.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more