Citigroup on Wednesday raised its forecast for the pace of Russian economic growth to 6.2 percent this year as consumer spending accelerates. The economy may expand faster than the previous forecast of 3 percent, supported by an increase in incomes, Elina Ribakova and Natalia Novikova, analysts at Citigroup in Moscow, wrote in a report. Real wages are set to increase by about 6 percent, they said.
"We believe the economy will already have turned to growth in the first quarter, supported by a pickup in household consumption," the report said. Russian retail sales rose for the first time in a year in January as slowing inflation and higher wages boosted spending. Sales grew an annual 0.3 percent and real wages advanced an annual 2.6 percent in the same month, according to the State Statistics Service. Inflation slowed to an annual 8 percent. The economy contracted a record 7.9 percent last year. The statistics office has yet to publish fourth-quarter data, though some economists have estimated that the decline eased in the final three months.
Gross domestic product shrank an annual 2.2 percent last quarter, ING Bank said Feb. 2. That compares with an 8.9 percent decline in the third quarter and a record 10.9 percent slump in the second.