Russia’s economic activity continued to pick up in Q1 2023, according to high-frequency data, the Central Bank said in a press release following its board meeting on Friday, Trend reports with reference to TASS.
"In 2022, GDP declined 2.1%, which is better than the February estimate by the Bank of Russia. High-frequency data for the first quarter of 2023 show that economic activity continues to pick up. Growing domestic demand is supporting an improvement in business sentiment despite some deterioration of the external environment," the regulator said.
Meanwhile, the current capacity to expand production in the Russian economy is largely limited by the labor market.
"Unemployment dropped to a new low. Labor shortages are increasing in many industries amid the effects of the partial mobilization as growth in businesses’ demand for labor continues. In these circumstances, productivity growth can lag behind real wage growth," the Central Bank said.
Earlier, the regulator revised its GDP growth expectations for 2023 and it currently projects it from -1% to 1% compared with contraction by 1-4% expected previously.
In 2023, Russia’s economic recovery is expected to continue, with growth accelerating to 0.5-2.5%, whereas by 2025 it is likely to stabilize at 1.5-2.5%, according to the Bank of Russia.