Concerns are growing about Russia's economy. In the first quarter of 2005 gross domestic product grew at an annual rate of 5.2%, well below the 7.6% recorded a year earlier. In May industrial production grew just 1.4% year-over-year. The slowdown reflects stagnation in oil output linked to the government's legal attack on the Yukos oil company, as well as export bottlenecks. But rising inflation and a strengthening ruble are also squeezing manufacturers.
In a June 20 report the Organization for Economic Co-operation & Development criticized the government for stalling economic reforms and increasingly interfering in the economy. "Russia's long-term growth depends on checking such tendencies and reinvigorating market reforms," the report warned.
Edited by Rose Brady