HANOVER, Germany (Reuters) - Russia’s economy expanded by a less-than-expected 1 percent in the first quarter of 2013, which is likely to force a cut in the growth forecast for the full year, Economy Minister Andrei Belousov said on Sunday.
“The results of the first quarter seem to be worse (than expected),” Belousov told journalists on the way to Hanover as part of an official visit, adding that growth in gross domestic product in the first quarter was probably around 1 percent.
He said the ministry would cut the 2013 GDP forecast to below 3 percent in a conservative scenario or to around 3.2 percent in an optimistic one.
The ministry had earlier estimated the economy was likely to grow by 3.6 percent this year. It warned at the end of March that it would probably cut its GDP forecast for 2013.
“I can say for sure that in our (new) forecast for 2013 we will cut estimates for exports of natural gas, (and) investment estimates will be lowered. Consequently, the pace of GDP growth will also be lowered,” Belousov said.
President Vladimir Putin said inflation is likely to exceed 6.3 percent this year, surpassing an economy ministry forecast of up to 6 percent.
Putin spoke hours after Belousov said the ministry would keep its 5 to 6 percent inflation forecast for the year, counting on a slowing rate in consumer price rises in the coming months. Annual inflation came in at 7 percent in March.
“Looking at it now, we can reach 5.8 to 6 percent for the year,” Belousov added, echoing estimates by the Russian central bank. But Putin said in Hanover that inflation would be “slightly bigger” than 6.2 to 6.3 percent.
Consumer prices often stabilize or fall in the summer months, when supply of fruit and vegetables increases.
Reporting by Alexei Anishchuk, writing by Lidia Kelly and Steve Gutterman,; Editing by Jason Webb