Russia cuts 2013 growth forecast to 1.8%

Russia lowered Monday its 2013 economic growth forecast to 1.8 percent from a previous estimate of 2.4 percent after a poor first-half performance, Russian news agencies reported citing the government.

If the figures are confirmed, it will be the first time since the 2008-09 financial crisis that the Russian economy has performed so badly. In 2012, Russia's economy grew 3.4 percent, and in 2011 it was at 4.3 percent.

For next year, the government lowered its forecast to between 2.8 percent and 3.2 percent growth, instead of the previously communicated 3.7 percent.

This is the second time this year the Russian government has lowered its 2013 Gross Domestic Product (GDP) growth forecast, having cut in April to 2.4 percent from 3.6 percent.

Disappointing second quarter figures published at the beginning of this month forced the government to once again reviewing its projections.

Referring to government documents, Russian media also said the growth forecast for industrial production has been reduced to 0.7 percent from 2.0 percent.

On the back of a worsening business climate in Russia, the government has also revised upwards the estimated outflow of foreign capital, to $70 billion (52 billion euros).

Economy Minister Alexei Ulyukayev recently acknowledged that Russia was entering a period of "stagnation", but rejected the idea put forward by some economists that the economy could be on its way to recession.