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 lukas.alpert@wsj.com

(END) Dow Jones Newswires

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

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