By Lukas I. Alpert

MOSCOW--Russia's economy grew 0.1% in the second quarter, meaning the country has avoided slipping into a technical recession, the economy ministry said Friday.

Russia's gross domestic product shrank 0.5% in the first quarter as the economy was hit by the fallout from Western sanctions and the country suffered from high capital outflows.

Many economists classify a recession as two consecutive quarters of economic contraction.

The government had said it expects the economy to expand 0.5% this year, which would be the slowest pace since Russian President Vladimir Putin came to power in 2000--apart from 2009's contraction amid the financial crisis.

Earlier Friday, the Bank of Russia raised its key interest rate for the third time in five months in a surprise move, and warned there may be more to come if political shocks prevent high inflation from coming down.

Write to Lukas I. Alpert at

(END) Dow Jones Newswires

July 25, 2014 10:00 ET (14:00 GMT)

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