Russia’s record heat wave and worst drought in 50 years may spur inflation and make economic growth more reliant on state support as factories suspend production and consumer demand slows. Agriculture accounts for about 4% of GDP and is the hardest hit part of the economy with the government declaring grain yields down 20% so far this year. At present, grain inventories are sufficient to restrain inflation, but some sort of negative cost impact is expected in third quarter of 2010 for the consumer space.
Source: www.themoscowtimes.com/index.php