Russia's Q1 GDP grows 5.4% - stats service

BY Reuters | ECONOMIC | 05/17/24 12:00 PM EDT

MOSCOW, May 17 (Reuters) - Russia's gross domestic product (GDP) rose by 5.4% year-on-year in the first quarter after growing 4.9% in the fourth quarter of 2023, the state statistics service said on Friday.

In the first quarter 2023 Russia's GDP contracted by 1.6%.

The economy ministry earlier estimated first quarter GDP growth at 5.4%, the central bank - at 4.6%. Analysts polled by Reuters had expected a year-on-year increase of 5.3%.

The Bank of Russia sees Russian GDP growth slowing down to 4.4% in the second quarter compared to the same period a year ago as a result of tight monetary policy.

The economy ministry last month raised its 2024 GDP growth forecast to 2.8% from 2.3% in its previous estimate. The central bank improved Russia's economic growth prospects to 2.5-3.5% from the previous range of 1.0-2.0%.

The most optimistic forecast for this year's Russian GDP was given by finance minister Anton Siluanov, who predicted the growth this year at the level of 2023 - 3.6%.

Russia's rebound from a 2022 slump relies heavily on state-funded arms and ammunition production as Moscow prosecutes its war in Ukraine, masking problems that are hampering an improvement in Russians' living standards.

The International Monetary Fund raised its 2024 forecast for Russia's GDP growth to 3.2% from the 2.6%, pointing to strong government spending and investment related to the war, as well as higher consumer spending in a tight labour market and strong oil export revenues in spite of Western sanctions. (Reporting by Darya Korsunskaya; editing by Guy Faulconbridge)

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