UPDATE 2: Econ ministry sees Russia’s investment flat in Apr–Jun

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MOSCOW, Aug 7 (PRIME) -- Russia’s fixed capital investment was almost flat in April–June due to an 11.9% year-on-year decline in government investment in January–May, the Economic Development Ministry said in a research note on Wednesday.

“According to the Economic Development Ministry assessment, fixed capital investment demonstrated close-to-zero dynamics in the second quarter of 2019, which was, among other things, linked to decreasing investment of the federal budget as compared to the same period of the previous year (an 11.9% fall on the year in January–May),” the document read.

The factor contributed minus 0.9 percentage points to the fixed capital investment dynamics in January–June, the ministry said. Investment in the construction industry was flat in the period. Investment in machinery and equipment imports from the non-CIS states dropped 3.6% on the year in April–June, and production of domestic machinery and equipment slowed down on the quarter in the three months.

In July, the central bank said fixed capital investment had decreased 1.3–1.8% on the year in April–June attributing the slide to lower government investment. According to the Federal State Statistics Service, Russia’s fixed capital investment grew 0.5% in January–March.

The Economic Development Ministry earlier projected a 3.1% rise of investment in the entire 2019, as compared with a 4.3% advance in 2018. It also forecast acceleration of the indicator to 7% in 2020, 6.3% in 2021, 5.8% in 2022, 5.6% in 2023, and 5.3% in 2024.

Deflation in Russia is highly likely to amount to up to 0.2% in August due to decreasing prices for fruit and vegetables and annual inflation will slow down to 4.4–4.5% in the month, the ministry also said.

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