Strong domestic demand is driving economic growth in Russia, but an appreciation of the ruble is hurting the manufacturing and trade sectors, a new report by the World Bank said. The report reflected concern in Russia about the ability of its manufacturing sector to compete internationally, concern that has prompted Russian officials to talk of possibly delaying the country's accession to the World Trade Organization (WTO).
"Preliminary data for the first two months of 2007 suggest that the industrial slowdown may be continuing. The slowdown in manufacturing appears to be related to increasing competitive pressure from the rapid appreciation of the ruble," the World Bank's Russian Economic Report said.
The Washington-based World Bank said that preliminary estimates suggested the economy had grown by 6.4% in 2005, down from 2004, when growth was 7.2%.
Industrial production showed a particularly sharp reduction in growth, from 8.3% in 2004 to 4% in 2005.
Copyright Agence France-Presse, 2006