MOSCOW (Reuters) – Russia’s retail sales rose more than expected in April as the economy rebounds from the impact of last year’s COVID-19 lockdown, adding weight to officials’ assurances of a faster-than-expected recovery, data showed on Friday.
Retail sales rose 34.7% in year-on-year terms, the statistics service said, beating a 23% increase forecast in a Reuters poll of analysts.
The central bank and economy ministry have said the economy will recover to pre-pandemic levels in the next few weeks and GDP growth may come close to reaching the 3% target in 2021. Lockdown restrictions stifled economic activity during the onset of the pandemic last April.
Russia’s commodity-dependent economy is on the mend after a 3% contraction in 2020, its sharpest in 11 years, although analysts warn that the rebound will run out of steam due to a lack of structural reforms and investments.
In month-on-month terms, retail sales, a barometer of consumer demand and Russia’s key economic driver, were up 0.3% in April.
Finance Minister Anton Siluanov on Thursday warned that Russia’s recovering economy was at risk of overheating, with annual inflation already high at 5.9%, well above the central bank’s 4% target.
High inflation has prompted the central bank to raise rates twice this year, to 5%, making lending more expensive. The key rate is widely expected to be further raised to 5.25% next week, a Reuters poll of analysts showed.
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