Russian economy grew 2.3% in 2018, beating expectations
Russia’s economy grew 2.3% last year, growing faster than the government and IMF predicted, state statistics released on Monday showed.
Russia’s growth rate accelerated by 1.6% in 2017 and exceeded the Economy Ministry forecast by 1.8% as well as the International Monetary Fund forecast by 1.7%.
The country’s economy only returned to growth in 2017 after two years of recession in 2015 and 2016.
Russian statistics agency Rosstat said GDP last year was 103.6 trillion rubles (1.38 trillion euros), with growth in sectors such as hotels and restaurants boosted by hosting the World Cup.
The Economy Ministry had initially forecast growth of 2.1% before revising it to 1.8%, taking into account the impact of US sanctions on the ruble.
Strong growth in the construction sector of 5.3 percent was one of the factors that pushed the figures for the year higher than expected.
This is due to large construction projects such as oil and gas facilities and the new Novatek liquefied natural gas plant in northern Siberia, the economy ministry said.
Figures still well below the economic targets declared by the Kremlin
Novatek is one of the largest producers of natural gas in Russia.
The latest figures show Russia “made significant upward revisions” to its quarterly growth figures for the first half of last year, London-based research group Capital Economics said.
He said the figures suggest that Russia’s growth has already peaked and “will average 2% in 2019 and 1.3% in 2020”.
As Russia has turned the corner after the worst recession under Vladimir Putin’s reign since 2000, the numbers remain well below the economic targets declared by the Kremlin.
Last year, Putin said he wanted his last four-year term as president from 2018 to 2024 to see 4% annual growth.
During his campaign for a fourth term last year, Putin said he wanted to halve the number of people living in poverty and increase GDP per capita by 50% by 2025, which would require annual growth of 4%.
Russia’s central bank has forecast annual growth of between 1.5% and 2% for the period between 2018 and 2020, calling for structural reforms to diversify the economy.
Independent journalism costs money. Support Times of Malta for the price of a coffee.