The Finance Ministry has submitted its draft federal budget for 2007 to the government.
"Economic growth in 2007 will be driven by an increase in consumer and investment demand but domestic demand will grow slower than in this year," the document said.
The federal budget for 2007 and a 2007-2009 financial plan aim to increase investment in the Russian economy, create conditions for its sustainable growth and make it more competitive.
The Finance Ministry also said capital inflow in Russia would total $9.1 billion in 2007.
In the first half of 2006, net foreign capital inflow stood at $11 billion.
The Finance Ministry also said fixed capital investment would grow 10.4% in 2007.
"The stable macroeconomic situation, the lighter government debt burden and the high level of gold and foreign exchange reserves will contribute to the continuing favorable investment climate," the ministry said in the guidelines of the government's budget and tax policy.
Real household incomes are expected to rise 10.2% in 2007, the ministry said.
"This will contribute to the reduction of poverty in the country. The share of individuals with incomes below the subsistence minimum will fall from 18.4% of the total population in 2005 to 14.3% in 2007 and 11.6% in 2009," the guidelines said.
According to the 2002 census, Russia has a population of about 142 million.
Government investment in Russia will rise to 2.7% of GDP in 2007 from 2.1% in 2006, the guidelines said.
