Economic growth in Russia predicted by Cabinet ministers

Russia’s Deputy Prime Minister Alexander Zhukov forecasted economic growth, thanks to soaring prices for the country's main export commodity - oil.

Zhukov told a Cabinet meeting that this year's gross domestic product had been bumped up by one-tenth of a percentage point, to 5.9 percent, while GDP in 2006 was forecast to grow by 5.8 percent, compared to earlier forecasts of 5.6 percent, says the AP.

"This allows us to correct our revenues forecast, and we have the chance to finance major investment and social projects. For instance, 1.5 million rubbles from this means will be spent on the support of social organizations of invalids," Zhukov was quoted as saying by ITAR-Tass.

"Lawmakers have their own proposals for how to use these additional resources. We will discuss them over two weeks before the budget is considered by the government," he said.

Last week, Finance Minister Alexei Kudrin said that the 2006 budget would be revised upward to reflect government forecasts that oil prices will stay at around US$40 (Ђ32.94) per barrel, instead of US$35 (Ђ28.82) per barrel.

Russia's economy has recovered since the 1998 financial collapse, thanks largely to a protracted period of high oil prices, growing at 7.3 percent in 2003 and 7.1 percent in 2004.

President Vladimir Putin has made doubling the economy by 2012 a top goal for his government. Reaching that target, however, would require that such growth rates be maintained, and economists warn it would be difficult.