Bloomberg News

Russia Raises GDP Estimate as Growth Surges Most in a Year

December 13, 2011

(Updates with stocks, ruble in fifth paragraph, trade surplus in final.)

Dec. 12 (Bloomberg) -- Russia’s economy grew at the fastest pace in more than a year in the third quarter as agricultural output, construction and retail sales surged.

Gross domestic product expanded 4.8 percent in the July- September period from a year earlier, the fastest pace since the second quarter of 2010, after increasing 3.4 percent in the previous three months, the Moscow-based Federal Statistics Service said today in an e-mailed statement. That was in line with the first estimate by the service last month.

The world’s largest energy exporter is seeking to shield its economy from Europe’s debt crisis as Prime Minister Vladimir Putin prepares to contest a presidential election in March. Agricultural output jumped 14.6 percent from last year when the worst drought in half a century ravaged Russia’s harvest, the service said. Growth may reach 4.5 percent this year after retail sales rose and import growth slowed more than expected, Deputy Economy Minister Andrei Klepach said.

“We’ve slightly lifted the GDP forecast for this year to 4.2 percent” from 4.1 percent, Klepach told reporters today in Moscow. “Based on how the statistics service started revising retail sales and based on how the investment data may be revised, a reading of 4.5 percent or slightly higher is fairly likely.”

The ruble-denominated Micex Index of 30 stocks retreated 2.8 percent to 1,356.55 at 6:20 p.m. in Moscow, reversing gains of as much as 2.2 percent earlier and heading for its weakest level in more than two months. The ruble fell for an eighth straight day, weakening 0.4 percent to 31.5726 per dollar.

New Forecast

Construction rose 6.9 percent in the third-quarter from the same period of 2010 after a 0.1 percent rise in the second quarter, the service said. Retail sales jumped 5.4 percent after a 2.3 percent rise.

The Economy Ministry has prepared a new “working forecast” to take into account revisions by the statistics service through the first nine months of this year, Klepach said. The ministry still predicts 3.7 percent growth next year after the International Monetary Fund said last week there were “significant downside risks” to the Washington-based lender’s 3.5 percent forecast.

The economy may be buoyed in the final months of the year as import growth slows, leading to a wider-than-expected trade surplus, Klepach said.

“Our export forecast was slightly lowered while our import forecast was lowered more significantly,” he said. “The slowdown in import growth was more intensive than we’d expected.”

Russia’s trade surplus unexpectedly widened in October to $16.9 billion, the central bank said today on its website. Economists had predicted a contraction to $15.6 billion, according to the median of 12 estimates in a Bloomberg survey.

--With assistance from Zoya Shilova in Moscow. Editors: Paul Abelsky, Andrew Langley

To contact the reporter on this story: Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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