Russian GDP

Meanwhile Mother Russia trundles on, and the economic performance has been and remains robust. Having grown by 7.9 percent (year on year) in the first half of 2007 (as compared with 6.7% y-o-y in H1 2006), Russia is more than likely to post full-year GDP growth of over 7 percent in 2007 despite some recent slowing down (of which more below). This growth in output continues to be driven - following a pattern which we are observing across central and eastern Europe - by buoyant household consumption and booming construction activity. Domestic consumption in fact increased by 9.8 percent in the first half of 2007, contributing in the process about 6.7 percentage point to the half yearly GDP growth.

Manufacturing growth has been solid in recent years, but, as we will see, it has actually started slowing notably in the second half of 2007.