The Russian economy, hurt by weak energy prices and Western sanctions, returned to growth late last year after seven quarters of contraction, official data suggested on Wednesday.
Russia’s statistics service surprised economists by finding gross domestic product (GDP) contracted by only 0.2 percent in 2016.
That implies fourth-quarter growth could have been around 1 percent year-on-year if there were no revisions to data for the previous three quarters.
“The important thing is that the economy showed a stronger recovery at the end of last year,” said Dmitry Polevoy, chief Russia economist at ING Bank.
“Growing private consumption and investments will fuel headline GDP growth, and an improving expansion of exports will mostly offset the rebound in imports,” he added.
The GDP figures chime with upbeat comments from Russian policymakers that the commodity-dependent economy is over the worst of a deep slump after a deal by global oil producers to cut output helped support energy prices.
Signs of economic recovery also strengthen the hand of President Vladimir Putin in the lead up to next year’s presidential election.
Last year’s GDP data benefited from an improvement in the mining and manufacturing sectors, but consumer-facing sectors such as hotels and retail trade contracted.
A Reuters poll of 15 economists late last year predicted the Russian economy had contracted by 0.5 percent in 2016.
Rosstat, the data agency, on Wednesday also revised down its estimate of the GDP decline Russia suffered in 2015 to a drop of 2.8 percent from an initial reading for a 3.7 percent fall, reflecting changes to its methodology.
Citi economists said the Russian economy was entering 2017 with strong momentum and predicted GDP could rise by 2 percent this year, versus the government’s official forecast for growth of 0.6 percent.
Russian Economy Minister Maxim Oreshkin said at the World Economic Forum in Davos last month the economy could grow 2 in 2017 percent as long as there were no external shocks such as a renewed fall in oil prices.
