May 17, 2017 / 1:12 PM / 3 years ago

Russian economy extends recovery in first quarter with 0.5 percent growth year-on-year

MOSCOW (Reuters) - The Russian economy continued to expand modestly in the first quarter of 2017, growing 0.5 percent year on year, preliminary data from the Federal Statistics Service showed on Wednesday.

It was unclear what drove economic growth in the January-March period as the statistics service, Rosstat, only reveals a breakdown of the data with a time lag.

Gross domestic product (GDP) returned to growth in the fourth quarter, expanding by 0.3 percent after seven quarters of contraction that were mainly caused by a drop in oil prices and Western sanctions over Russia’s role in the Ukraine crisis.

Signs of recovery have prompted Russian officials to pledge the economy will grow 2 percent this year, something about which independent experts are skeptical. The latest Reuters poll of analysts and economists forecast GDP will grow 1.1 percent this year.

Investors have also questioned the accuracy of Russian GDP figures after Rosstat recorded a GDP contraction of just 0.2 percent last year, much shallower than expected, while revising the 2015 contraction to just 2.8 percent from an initial 3.7 percent.

Reporting by Andrey Ostroukh; Editing by Alexander Winning

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