Russia growth slowed to 1.3% in 2019

Russia's economic growth slowed to 1.3 per cent last year, the state statistics agency said Monday, with the lethargic pace presenting a major headache for the Kremlin.

Russia's economy, long battered by Western sanctions and highly dependent on high prices for its energy exports, slowed considerably from the 2.5 per cent growth registered in 2018 and failed to meet even the government's forecast of an increase of 1.4 per cent.

Sluggish economic growth and five years of falling real incomes present a major challenge to the government as President Vladimir Putin has said the country should see a higher pace of economic growth than the rest of the world in 2021.

The Rosstat statistics agency said that GDP last year was 109.3 trillion rubles (USD 1.7 trillion).

At the beginning of his fourth presidential term in 2018, Putin set a goal of reaching four percent economic growth with the help of an ambitious "national projects" programme.

Russia's economy had only just returned to growth in 2017 after two years of recession thanks to low oil prices and Western sanctions over Moscow's role in the Ukraine crisis.

During his annual state of the nation address last month, Putin said that the real incomes of Russians should receive a "considerable" boost.

"To obtain such dynamics we have to launch a new investment cycle," Putin said as he announced new cash payouts for births and the extension of child benefit plans.

He also appointed a new government headed by former tax chief Mikhail Mishustin, who said for his part that authorities needed to reassure the business community and stimulate the growth of investment.