Russian growth picks up in 2Q

Moscow: Russia's economic growth accelerated in the second quarter of this year after a sharp slump at the beginning of 2019, while remaining below a target set by authorities.

Gross domestic product grew 0.9 percent in the last year against a rise of 0.5 percent in the first quarter then considered disappointing, Russia's statistics agency Rosstat said. This corresponds to a year-on-year growth of 0.7 percent in the first half of the year -- lower than the growth the government has hoped for in 2019.

The slump in the Russian economy at the beginning of the year was partly due by the rise in VAT on January 1, a measure that contributed to President Vladimir Putin´s fall in popularity over the last year.

The situation remained difficult for households at the beginning of the year. In a recent economic report, the Ministry of Economy reported an acceleration of growth in the second quarter driven by the industrial sector, with the chemical and metallurgical sectors in the lead.

But it also pointed to a further decline in the purchasing power for Russians, which has been decreasing for several years. At the beginning of his fourth term in the Kremlin in 2018, Putin set a target of an annual growth of 4 percent and announced ambitious "national projects."

The cost of these projects -- falling into twelve categories that range from health to infrastructure -- is estimated at $400 billion by 2024, of which $115 billion is meant to come from private investment.