(MENAFN - AFP) Russia lowered Monday its 2013 economic growth forecast to 1.8 percent from a previous estimate of 2.4 percent after a poor first-half performance, Russian news agencies reported.
If the new forecasts by the economic development ministry turn out to be accurate, it will be the first time since the 2008-09 financial crisis that the Russian economy has performed so badly.
"This is a bad surprise. It is quite rare that government forecasts are lower than market forecasts," said Natalya Orlova, an economist at Alfa Bank.
Analysts were also sceptical about the prospects of a rebound in growth next year.
"I don't see where (a rebound) is going to come from: industry is not growing, investment is down, there is only consumer demand, but this will probably stimulate imports and not domestic industry," Orlova said.
In 2012, Russia's economy grew 3.4 percent, and in 2011 it was at 4.3 percent.
For next year, the government lowered its forecast to between 2.8 percent and 3.2 percent growth, instead of the previously communicated 3.7 percent.
The government also lowered its industrial production growth forecast to 0.7 percent from 2.0 percent.
This is the second time this year the Russian government has lowered its 2013 Gross Domestic Product (GDP) growth forecast, having cut in April to 2.4 percent from 3.6 percent.
Disappointing second quarter figures published at the beginning of this month forced the government to once again review its projections.
On the back of a worsening business climate in Russia, the government has also revised upwards the estimated outflow of foreign capital, to 70 billion (52 billion euros).
Economy Minister Alexei Ulyukayev recently said that Russia was entering a period of "stagnation", but rejected the idea put forward by some economists that the economy could be on its way to recession.
The slow growth rate puts in jeopardy the economic and social development goals that President Vladimir Putin has set for his third term in office as officials have estimated the Russian economy will need to grow by at least 5 percent annually to hit the targets.
Certain economists, including at the International Monetary Fund, believe that Russia's economy is growing as fast as it can and that structural and institutional reforms are needed to unlock growth potential and reduce dependency on oil and gas exports.
Russia's difficult business climate, with cumbersome bureaucracy and courts often seen as not impartial, have also been cited by analysts as a brake on growth.
At the end of June Putin announced several measures to boost activity, including infrastructure investments.
Despite the slowing growth the Russian central bank has held its main interest rate at 8.25 percent for the past year as it tries to contain inflation, which at 6.5 percent is above its maximum target of 6.0 percent.