Russia's high rate of economic growth in recent years is slowing down and will drop further unless there is enough investment to boost productivity, the World Bank warned last week.
The Washington-based international lender said in its latest quarterly report released May 30 on Russia that the spurt of growth after the 1998 financial crash, when a sharp devaluation of the ruble benefited industry, was coming to an end.
If the Russian government wanted to foster long-term growth, it would have to increase investment levels to generate higher productivity since excess capacity had largely been used, said the World Bank.
"For the past three years, the economy has grown rapidly although growth rates have declined year after year. This trend continued over the first months of this year," the report said.
The growth of industrial output slowed to 3 percent in the first four months of 2002 and investment growth fell to 1.2 percent in the first quarter, it pointed out.
After years of economic decline since the 1991 collapse of the Soviet Union, the 1998 crash and ruble devaluation made imports prohibitively expensive and slashed the costs of Russian industry, allowing domestic manufacturers to boost output.
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