Aug. 29 (UPI) -- The Russian economy contracted last month because of pressure in some of the non-oil sectors, a report from the Economic Development Ministry found.
The ministry reported growth in gross domestic product in July was 1.5 percent, which marks a slight slowdown, but still an improvement from the negative GDP from last year.
"Weaker dynamics of agriculture, industry, trade, which was partially offset by growth in construction, contributed to slowdown of economic growth results in comparison with April-June," the report, as cited by Russian news agency Tass, read. "The July data is hardly worth interpreting as a change in the positive trend."
The ministry said some acceleration was expected in the second half of the year because of recovery in the industrial sector. The Central Bank of Russia said it was forecasting a baseline growth rate for GDP for the year at between 1.3 percent and 1.8 percent.
In its latest report, the bank said there were some short-term inflationary risks because of lingering uncertainty in the commodity market, but those risks were subdued by commitments to balancing supply-side strains through an OPEC-led production agreement.
Russia is the largest non-member state contributor to an effort by the Organization of Petroleum Exporting Countries to draw down the surplus for the five-year average of crude oil inventories through managed production declines. Lukoil, one of the largest energy companies in Russia, reported second quarter production of crude oil was around 156 million barrels, a decline of about a half percent from the first quarter. Domestic production declines were offset by gains from the West Qurna-2 project in OPEC-member Iraq.
The price for Urals crude oil, the Russian benchmark, was trading at around $51.50 per barrel early Tuesday, an improvement from the average of $50 per barrel for the three-month period ending in March.
"If oil prices are maintained relatively high over 2017, this will continue to buoy economic activity in Russia," the Central Bank of Russia said.
A July report from the International Monetary Fund forecast GDP growth next year at 1.4 percent and said the "main risk" to the Russian economy is a drop in crude oil prices.