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Russian economy grows more than 7.5% in H1, 2007

The Russian economy grew more than 7.5% in the first half of 2007, the head of the presidential expert department said Friday.

„The growth rates averaged 7% in the past period and more than 7.5% this year. Russia has achieved considerable successes in the economy and these successes are evident both in the quality and statistical levels,” Arkady Dvorkovich said. The presidential aide said Russia had reached economic independence and should no longer fear negative developments on world markets.

„Finally, we can confirm that we have achieved real financial independence, because our foreign debt is low according to international standards, and markets are ready to work with Russian companies and the Russian government at any moment, on terms advantageous for us, and not on the terms we are forced to accept from the market,” Dvorkovich said.

Russian Finance Minister Alexei Kudrin said in May Russia’s state debt in 2008 would total 8.5% of the gross domestic product (GDP) and would be the lowest in the country’s history. Dvorkovich also said the ruble appreciation against the dollar/euro basket would not exceed 5% in 2007 and this figure matched the Central Bank’s expectations for this year and would contribute to growth in productivity in the Russian economy and more efficient use of resources.

Dvorkovich said the Russian financial market was expected to grow further while an increasing number of companies and retail investors were interested in buying the securities of Russian companies. Chairman of the Russian Central Bank Sergei Ignatyev said June 7 that net private capital inflow in Russia exceeded $60 billion in the first five months of 2007, compared with $42 billion for 2006.

Ignatyev said auctions for the assets of bankrupt oil company Yukos, the initial public offerings by state-run retail savings bank Sberbank, and government-controlled foreign trade bank Vneshtorgbank (VTB) were the main factors contributing to a sharp increase in capital inflow in Russia. (