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Today in Russian Business – Jan 13, 2012

Prime Minister Vladimir Putin has told the media that Russia’s GDP grew by 4.2% in 2011, the world’s third highest growth rate among leading economies.  Capital flight statistics released yesterday were worrying, but, in the short term, ‘Russia’s large capital flight is sustainable because it is more than made up for by an oil and gas driven trade surplus’, says the FT,  Part of Putin’s election campaign program is a vow to create 25 million new jobs by 2032 and raise foreign investment to 25% of GDP from the current 20%.  President Medvedev has criticized state banks for failing to support small and medium businesses.   According to the Audit Chamber, misspending by state officials in 2011 reached the record amount in the last decade, at $22.7 billion.  Russian car sales, often seen as an indicator of economic growth, are expected to increase 12% in 2012, a significant drop on the 39% growth spurt witnessed in 2011.  US auto giant General Motors sees a strong future in the market, with plans to invest $1 billion in Russia over five years to more than double production by 2015.  The European Bank for Reconstruction and Development has apparently acquired 15% of Katren, Russia’s third- largest pharmaceuticals distributor.  According to Reuters, booming food retailer Magnit plans to open between 1,400 and 1,425 new outlets this year, up from 1,254 openings in 2011.