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POLL-Russian economy seen staging tepid recovery this year

Russia's economy is seen posting growth of 1.3 percent this year, helped by central bank interest rate cuts and rising wages fuelling increased consumption, a Reuters poll of economists showed on Friday.

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DNA Web Team

Updated: Jun 30, 2017, 07:27 PM IST

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Russia's economy is seen posting growth of 1.3 percent this year, helped by central bank interest rate cuts and rising wages fuelling increased consumption, a Reuters poll of economists showed on Friday.

Economists have barely changed their forecasts for Russian gross domestic product from last month's poll, when the median forecast was for Russian GDP to rise 1.4 percent this year.

Their reluctance to significantly change their predictions reflects the fact that while macroeconomic data in May was upbeat, a new bout of oil price weakness in June clouds the outlook for the key Russian export.

In May real wages rose 3.7 percent, outstripping forecasts to hit their highest since early 2014, while retail sales rose for the second month in a row, after more than a year of contraction.

Russia's economy is finding its feet after a two-year economic slump driven by weak oil prices and Western sanctions over the Ukraine conflict.

The recovery has been helped by the central bank cutting its main lending rate at three consecutive policy-setting meetings this year.

The latest poll predicts there will be another 75 basis points of rate cuts by year-end, bringing the policy rate to 8.25 percent from its current level of 9 percent.

Retail sales are seen rising 1.5 percent this year, versus a prediction for a rise of 1.3 percent in the May poll. Industrial output is seen growing by 1.9 percent in 2017, compared to a previous forecast for growth of 2.0 percent.

The consensus view on year-end inflation was unchanged, with a prediction for a reading of 4.1 percent, close to the central bank's target of 4 percent.

Analysts turned more bearish on the rouble, as the Russian currency fell in the wake of global oil prices hitting a 10-month low this month.

The rouble is seen at 58.5 to the dollar one year from now, compared with Friday's level of around 59.2. Last month the poll saw a level of 56.6 to the dollar in May 2018.

(Writing by Alexander Winning)

 

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)

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