Russian economy in Q1 may have grown at rate faster than in Q4 - CBR analysts

MOSCOW. April 16 (Interfax) - The Russian economy continued to grow in Q1 2024, at a rate that could even exceed that of Q4 2023, according to the Talking Trends bulletin prepared by the Central Bank's Research and Forecasting Department.

"In Q1 2024, the Russian economy continued to grow, perhaps even at a faster pace than in Q4 2023. The exception is the fuel industry, which reduced production for various reasons unrelated to domestic demand. Sources of growth are consumer and government demand, as well as some recovery in non-oil and gas exports. As a result, the tension in the labor market has further intensified, while the growth of nominal wages, according to the data for January, accelerated (although, apparently, partly due to the payment of bonuses at the end of the year)," the bulletin reads.

"Preliminary and survey data point to strong growth in the Russian economy in January-February and its likely continuation in March. Growth is particularly noticeable in industry, wholesale and retail trade and catering. Expansion of economic activity increases demand for labor resources, intensifying competition for them between companies and supporting high rates of increase in labor income," the regulator said.

The Central Bank analysts note that "incomes are sufficient both to increase savings and consumption".

"Therefore, the reduction of inflationary pressure in the economy and consumer sector is slow, despite tight monetary conditions. For inflation to return to target, it is necessary to maintain tight monetary conditions for a long time," the Central Bank analysts said.