MOSCOW (Reuters) – Russia’s economy avoided disaster at the height of the COVID-19 pandemic and is now approaching pre-crisis levels, President Vladimir Putin said on Friday, a claim supported by data showing a 34.7% increase in retail sales in April.
Russia’s commodity-dependent economy is on the mend after a 3% contraction in 2020, its strongest in 11 years, when lockdown restrictions choked economic activity, but officials say a return to end-2019 levels are imminent.
Retail sales, a barometer of consumer demand and Russia’s main economic engine, grew 34.7% year-on-year, Federal Statistical Service Rosstat said, beating forecast to increase by 23% in a Reuters poll of analysts.
Rosstat also said that Russia’s real wages, adjusted for inflation and released a month later than other indicators, rose 1.8% in March, below a Reuters poll predicting 2.1% .
“Russia’s economy and labor market are already approaching pre-crisis levels,” Putin told the St. Petersburg International Economic Forum, saying Russia had averted a “catastrophe” despite rising unemployment in last year and declining real incomes.
The unemployment rate peaked at 6.4% last year, but fell to an annual low of 5.2% in April, according to data released last month.
Economic growth and the recovery of living standards in Russia are crucial issues for Putin and the ruling United Russia party. The latter is preparing for the parliamentary elections in September after protests rocked the streets earlier this year.
Putin ordered Russia’s anti-crisis mortgage program to be extended for one year until July 2022, saying state-sponsored aid to support the construction sector and households could not be stopped suddenly.
He also proposed a new mechanism to support small and medium-sized businesses – a loan guarantee with partner banks that could attract at least 600 billion rubles ($ 8.22 billion) in additional funds for small businesses here. 2024 by giving them better access to credit. .
Loans in Russia are set to get more expensive as the central bank is expected to raise rates further amid high inflation, with the next hike possible later in June.
($ 1 = 72.9925 rubles)
Reporting by Alexander Marrow, Oksana Kobzeva and Vladimir Soldatkin; Editing by Andrey Ostroukh and Toby Chopra