Russia's economy grew at a slightly faster pace in the first quarter, data released by the Federal Statistical Service showed Tuesday.
Gross domestic product rose 4.9 percent year-on-year, following a 4.8 percent growth in the previous quarter. Economists had expected the pace of growth to slow to 4.1 percent. The economy ministry had forecast 4 percent growth for the first quarter.
The latest growth figure is the strongest since the September quarter of 2011, when it expanded 5 percent. The economy grew 4.3 percent in 2011.
"The headwinds facing the Russian economy are likely to increase," Capital Economics Chief Emerging Market Economist Neil Shearing said.
Russia is less directly exposed to the Eurozone debt crisis than other Eastern Europe nations and the financial linkages are less developed, the economist pointed out.
However, the indirect effects of the euro-crisis on Russia, which is a leading energy exporter, could be equally severe, with the biggest risk being that it triggers a fall in oil prices, he added.
"As Russia's vulnerability to a drop in oil prices increases, so do the chances of a period of below-trend growth over the next few years," Shearing said.
The International Monetary Fund had raised Russia's growth forecast to 4 percent for this year and 3.9 percent for 2013 in its latest round of projections in April.
Meanwhile, the Economy Ministry cut its 2012 growth forecast to 3.4 percent from 3.7 percent last month, citing downward revision in its investment forecast.
Data released by the Finance Ministry today showed that Russia's budget deficit narrowed to 0.3 percent of GDP in the four month period till April from 0.5 percent in the January to March period, which was downwardly revised from 0.9 percent reported earlier. The budget deficit figure for the January to April period was 60.35 billion roubles.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.