August GDP Up 7.1% yoy.

GDP growth slowed in August to 7.1% yoy, down from 7.7% in July and this year’s peak of 9.3% in June, government and national bank officials announced today. 8M06 GDP grew by 5.7% yoy, up from 5.5% in 7M06. Alexander Viktorov: The slowing growth owes mainly to the weaker harvest, which has led to a contraction in agriculture (down 2.8% yoy in 8M06, after a 3.3% yoy gain in 1H06) and a slowdown in food processing, which was the main reason for a slight deceleration in industrial growth (up 9.1% yoy in August after a 11.4% yoy gain in July). Retail trade (up 25.6% yoy in 8M06 after a 27% yoy gain in 1H06) appears only slightly affected by the big gas price increase for households of July 1.  Data for other sectors has yet to be announced. We have revised our forecast for 2006 GDP growth upward to 6.5% yoy.