Russia’s economic growth slowed sharply in the first three months of the year to the weakest pace in five consecutive quarters, preliminary data from the statistical office showed on Friday.
Gross domestic product grew 0.5 percent year-on-year in the first quarter from 2.7 percent in the final three months of 2018. Economists had expected 1.2 percent growth.
The latest pace of growth was the slowest since the fourth quarter of 2017, when the economy expanded 0.3 percent.
Capital Economic economist Liam Carson said the much weaker-than-expected year-on-year growth suggest that the economy shrunk on a quarterly basis in the first three months of the year.
“We think that this probably marks the trough and growth should pick up over the next few quarters,” the economist said.
“Even so, the latest data are likely to reinforce the central bank’s recent dovish shift, supporting our view that an interest rate cut is on the cards at next month’s meeting.”
After leaving the key interest rate unchanged in April for a third successive policy session, the central bank signaled that the rate may be lowered in the near term.
Carson predicted a quarter-point reduction in the interest rate to 7.50 percent at the next policy session on June 14.
The previous change in the rate was a quarter-point hike in December 2018.
The bank has forecast 1.2-1.7 percent growth for this year.
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