World Bank slashes Russia growth forecasts

MOSCOW, Oct 8 (Reuters) - The World Bank on Monday slashedits economic forecasts for Russia and cautioned that, even asgrowth slows, labour shortages show the world's ninth-largesteconomy is overheating.

The global development lender cut its forecast for economicgrowth this year to 3.5 percent from 3.9 percent previously,down from last year's growth of 4.3 percent. It lowered its 2013outlook to 3.6 percent from 4.1 percent.

"Whereas early in the year, growth was rising and inflationdeclining, now growth is declining and inflation rising," theWorld Bank said in its twice-yearly Russian Economic Report.

"A challenging external environment and worsening sentimentamong businesses and consumers translate into weak growthprospects."

(Reporting by Maya Dyakina; Writing by Douglas Busvine)

((douglas.busvine@thomsonreuters.com)(+7 495 775 1242))