FALCON POWERS – The Russian government statistics agency said on Friday that the country’s gross domestic product (GDP) rose 5.4% year-on-year in the first quarter, after growing 4.9% in the final quarter of last year.
Russia’s GDP had contracted 1.6% in the first quarter of last year. The Economy Ministry had earlier forecast GDP growth of around 5.4% in the first quarter, while the central bank’s estimate was for 4.6%.
Analysts in a Reuters poll had predicted a 5.3% year-on-year increase.
The central bank expects GDP growth to slow to 4.4% in the second quarter compared to the same period last year due to monetary policy tightening.
The Economy Ministry raised its forecast for full-year 2024 GDP growth to 2.8% from 2.3% in previous estimates last month.
The central bank also raised its economic growth projections for Russia to between 2.5% and 3.5% from the previous range of 1% to 2%.
Russian Finance Minister Anton Siluanov’s forecast for this year was the most optimistic at around 3.6% growth, similar to last year.
Russia’s recovery from the 2022 recession is heavily reliant on state-funded weapons and ammunition production as Moscow continues its war in Ukraine, masking the crises that are impeding improvements in living standards for Russians. The IMF raised its 2024 Russian GDP growth forecast to 3.2% from 2.6%, citing strong government spending, war-related investment, higher consumer spending in a tight labor market, and robust oil export revenues despite Western sanctions.
