Russia’s economy grew last quarter at the fastest pace since the three months ended September 2011, suggesting the world’s biggest energy exporter is more resilient to Europe’s debt crisis than economists estimated.
Gross domestic product expanded 4.9 percent from the same period last year after rising 4.8 percent in the fourth quarter, the Federal Statistics Service in Moscow said in an e-mailed statement today. The median estimate in a Bloomberg survey of 14 economists was 4.1 percent. The Economy Ministry projected growth at 4 percent.
President Vladimir Putin is counting on domestic demand to balance shrinking sales in Russia’s biggest trading partners, the European Union and China. Putin, who was inaugurated for his third term in the Kremlin on May 7, has said Russia’s growth must exceed the global pace of expansion over the next decade by gaining at least 6 percent annually to turn the economy into one of the world’s five largest by purchasing power by 2015.
“This is a very good figure under quite a challenging global backdrop,” said Dmitry Polevoy, chief economist for Russia at ING Groep NV in Moscow. “The upside surprise may be related to an even stronger gain from the government consumption and a better contribution from net exports.”
The 30-stock Micex Index, a ruble-denominated equities benchmark, was 0.1 percent lower at 1,338.45 at 6:15 p.m. in Moscow. The ruble erased earlier gains today, weakening 0.5 percent to 30.5550 against the dollar.
An increase in government spending, including additions to state pensions, in the run-up to March’s presidential election helped spur domestic consumption, Julia Tsepliaeva, head of research at BNP Paribas SA in Moscow, said in an e-mailed note.
Retail sales grew 7.3 percent from a year earlier in March, down from 7.7 percent the previous month. Real disposable incomes gained 2.8 percent and unemployment remained at 6.5 percent for a second month.
Russia’s economy grew at an average annual rate of 7 percent during Putin’s presidency from 2000 to 2008 before plunging 7.8 percent in 2009. The government reduced its projection for economic growth this year to 3.4 percent, from 3.7 percent, because investment will be weaker than initially estimated.
Bank Rossii last week refrained from cutting interest rates for a fifth month, keeping the refinancing rate at 8 percent as it seeks to bring inflation in 2012 below last year’s record-low level of 6.1 percent.
Policy makers said first-quarter production growth was “sufficiently high” and industrial capacity usage in March was near the level reached before the 2008-2009 crisis, according to a statement that accompanied Bank Rossii’s decision on May 10. The slowdown in March industrial output doesn’t pose risks to the broader economy, it said.
Higher-than-expected economic growth is strengthening the central bank’s incentive to extend the current pause in monetary easing and increases the probability interest rates will remain unchanged for three or four months, Tsepliaeva said.
The EU, Russia’s largest trading partner, is battling to staunch a debt crisis that is threatening to trigger another global slowdown. GDP in the 17-nation euro region stagnated in the latest quarter compared with the prior three months as Germany helped the bloc avoid its second recession in three years, the EU’s statistics office in Luxembourg said today.
Russian growth data “is a welcome relief following the disappointing first quarter GDP releases from elsewhere in emerging Europe earlier today,” said Neil Shearing, chief emerging-markets economist at Capital Economics in London.
“Russia is less directly exposed to the crisis in the euro zone than most of its peers in eastern Europe,” Shearing wrote in a note. “But the indirect effects of the euro crisis on Russia could be equally severe, with the biggest risk being that it triggers a fall in oil prices.”
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