Russia sees growth slowing to just 0.4pc

MOSCOW, June 16 (AFP): Russia's central bank said Monday it saw the country's growth rate slowing to just 0.4 per cent this year, while warning it would raise rates further if needed to combat inflation.

Moscow forecasts 0.5 per cent growth in 2014, while the IMF believes that Russia is already in recession, the economy hobbled by structural problems as well as concerns over the Ukraine crisis sparking an increase in capital flight.

Russia's central bank on Monday held its benchmark interest rate steady at 7.5 per cent, after raising it twice since March to keep a lid on inflation as the rouble slides.

But the bank warned it would raise rates again if necessary.

"In case existing inflation risks materialise, and threats to medium-term inflation targets emerge, the Bank of Russia will continue increasing the key rate," it said in a statement.

Russia's core inflation, which excludes volatile energy and food prices, came in at 7.0 per cent in May, and the bank said it looked unlikely it would fall back to its 5 per cent target level this year.