The
Russian economy continues to grow at a rapid pace. Official figures for growth
in GDP and industrial production for 2004 (7.1 and 7.3 percent, respectively)
were higher than widely expected. Real incomes increased by an estimated 7.8 percent
in 2004, and poverty rates have declined further. Inflows of foreign direct investment
reached record levels of USD 9.4 billion for the year. Foreign inflows also contributed
to higher inflationary pressures since the second half of 2004; CPI inflation
(11.7 percent) exceeded its planned annual target of 10 percent.
