Russia Raises Economic Growth Estimate to 4.3%

Russia's state statistics agency, Rosstat, raised its 2024 economic growth estimate to 4.3%, up from a previous estimate of 4.1%, the agency announced on Friday.

This increase is due to an increase in the fourth-quarter growth estimate of 4.5%, up from a previous estimate of 3.3%.

Russia's gross domestic product (GDP) for 2024 reached 201.2 trillion rubles ($2.41 trillion), according to the Russian statistics agency.

Rosstat stated that one of the factors behind the revision is increased growth in the construction sector, which the agency raised its estimate for by 2.5% to 4.2%.

Russia's economic growth is driven by spending on the war with Ukraine, which has been raging for more than three years, and is considered hyperinflationary, with annual inflation rates exceeding 10%.

Russia's central bank raised its key interest rate to its highest level in more than 20 years to control the economy and reduce inflation.

Statistics in Moscow do not specify whether production was for military purposes, but Rosstat reported that production of finished metal goods rose by 35%, while production of optics and electronics increased by 29%.

Gross domestic product growth slowed to 0.8% year-on-year in February from 3% in January, the lowest level since March 2023. The Ministry of Economy forecasts that the Russian economy will grow by 2.5% in 2025, compared to the central bank's forecast of 1% to 2%.

New data revealed that Russia's annual inflation rate rose to 10.34% in March, compared to 10.06% in February. This rate was slightly higher than economists' expectations in a Reuters poll of 10.2%.