The economy may expand an annual 8.3 percent in the second quarter, more than previously forecast, on domestic demand and aluminum prices, Renaissance Capital said Monday. The investment bank raised its estimate from 7.9 percent after higher wages, improved retail services and a decline in unemployment, as well as higher aluminum prices and a larger trade surplus, fueled growth, it said in an e-mailed statement. The economy probably grew 7.5 percent in the first quarter, according to RenCap. “The biggest contributors to the brighter outlook were factors suggesting that domestic demand is finally rebounding,” Alexei Moiseyev, RenCap’s senior economist, wrote in the statement. “These factors raise tentative hopes that the economic recovery in Russia may be based on more than just the export of expensive commodities.”
The economy may expand as much as 4.5 percent this year, according to Deputy Economic Development Minister Andrei Klepach. Consumer confidence rose in the first quarter after the unemployment rate fell in February for the first time in four months, reaching 8.6 percent. The average monthly wage gained an annual 2.9 percent in the month when the effects of inflation are stripped out, boosting retail sales. Russian service industries from banks to supermarkets expanded in March at the fastest pace since October, signaling “renewed momentum,” VTB Capital’s Purchasing Managers’ Index showed.