MOSCOW, April 29 (Reuters) – Sberbank cut its gross domestic product growth forecast for Russia to 0.5% to 1% from between 1% and 1.5% on Wednesday after a poor first-quarter economic performance.
Russia’s largest bank updated its forecasts ahead of the release of a preliminary first-quarter GDP estimate by the Economy Ministry on Wednesday and preliminary first-quarter data release by the statistics agency on May 15.
The Russian economy contracted by 1.8% in January and in February due to high interest rates, tax hikes, a strong rouble and weak prices for Russian oil before the Iran war began.
“The situation in the first quarter of the Russian economy was challenging against the backdrop of tight monetary conditions,” said Sberbank’s Deputy CEO Taras Skvortsov.
Russia’s mining and manufacturing sectors were hit hardest, while there was also a significant slowdown in consumer spending, affecting retail trade, Skvortsov said, adding that the construction sector had stagnated in the first quarter.
Sberbank forecasts inflation in 2026 at between 6% and 6.5%, above the central bank’s prediction of between 4.5% and 5.5%.
(Reporting by Elena Fabrichnaya; Writing by Anna Peverieri and Gleb Bryanski; Editing by Alexander Smith)
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