Russia’s economy unexpectedly grew in the fourth quarter before the full effect of the country’s currency crisis took hold.
Gross domestic product expanded 0.4 percent from a year earlier after a revised 0.9 percent gain in the previous three months, the Federal Statistics Service in Moscow said on Wednesday, citing a preliminary estimate. That was above the median estimate for zero growth by 11 economists in a Bloomberg survey. Full-year GDP rose 0.6 percent in 2014, the service said, confirming its first assessment in January.
The economy of the world’s largest energy exporter was grinding to a halt before an almost 50 percent crash in oil prices and the ruble’s worst crisis since 1998 brought Russia to the brink of a recession. Sanctions imposed by the U.S. and the European Union over the conflict in Ukraine cut off access to international markets and stoked capital outflows, forcing authorities to respond with spending cutbacks and an emergency increase in the benchmark interest rate in December.
“The economy is gradually entering a recession,” said Vladimir Tikhomirov, chief economist at BCS Financial Group in Moscow. “It’s difficult to say when a reversal will happen. I expect that it may happen in the course of the coming three to six months.”
A “one-time burst” of consumer demand in late 2014 may have supported growth, according to Tikhomirov.