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Growth

Russia's economy expands in second quarter

Russia's economy has expanded in the second quarter, but the growth was less than in the prior three months. Analysts expect the economy to eventually stagnate on account of Western sanctions.

Russia's statistics agency said Monday the country logged 0.8 percent growth in the second quarter, two weeks after a number of Western countries imposed harsh sanctions against Moscow for fomenting separatist violence in eastern Ukraine.

But the growth was 0.1 percentage points down from the previous quarter and economists polled by the Reuters news agency expect Russia's economy to stagnate in the second half of the year.

Russia's annexation of the Crimean peninsula from Kyiv sparked a massive capital flight. At the same time, Russian companies started investing less.

In July, after a Malaysian Airlines jet was apparently downed by pro-Russian fighters, the United States joined the European Union and other Western countries in intensifying sanctions against Russia's energy, arms and finance sectors.

The government in Moscow has said it is banking on 0.5 percent growth in 2014.

cjc/uhe (Reuters, AFP)