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Capital Economics

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Emerging Europe Economics Update

Emerging Europe Economics Update

Russia: Solid Q2 GDP growth unlikely to last

The Russian economy expanded by a solid 5.2% y/y in Q2 (up from 2.9% y/y in Q1). But given the impact of the current drought and, more notably, our view that oil prices will fall back later this year and stay there, we suspect that this will mark the high-point for annual GDP growth. The pace of recovery is likely to fade in the second half of the year and into 2011.

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