Russia's economy continues growing in Q1, pace slowing - Central Bank analysts

MOSCOW. April 15 (Interfax) - Russia's economy continued growing in Q1 2025, though the pace has been slowing, with the economy gradually emerging from the phase of severe overheating, the Central Bank of Russia said in its Talking Trends bulletin on the country's economy and markets.

"Data for January-February and the survey figures for February-March indicate that the economy has continued growing, albeit at a slower pace than in previous quarters. GDP in Q1 2025 should clearly exceed the level of Q3 2024, as seasonally adjusted," the Central Bank said.

"There will likely be slight growth in the country's GDP in Q1 2025 when adjusted for seasonality and as based on published statistics compared to Q4 2024. Very high figures for December 2024 and Q4 overall that are predominantly owing to large volumes of production under government orders are the main reason for the extremely elevated figures," the bank's analysts said in response to possibly slight growth compared to Q4.

"The situation overall indicates the [possible] beginning of Russia's economy gradually exiting the phase of severe overheating in which it was in 2024," the regulator said.

"Supplies of goods and services have been attempting to maintain pace with demand that has been rising at an accelerated rate at this phase. The problem is that this growth has been leading to increasingly higher prices rather than an increase in actual production volumes, which are increasing less and less owing to the limited production factors, with ongoing exceeding growth in demand and a widening gap between this and production capabilities, the Central Bank's analysts warn.