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Economy56 minutes ago (Jun 04, 2021 08:30AM ET)

© Reuters. FILE PHOTO: A shop assistant puts a sale sign on a show window in Moscow, Russia June 18, 2020. REUTERS/Shamil Zhumatov

MOSCOW (Reuters) -Russia’s retail sales rose more than expected in April as the economy rebounds from the impact of last year’s COVID-19 lockdown, adding weight to officials’ assurances of a faster-than-expected recovery, data showed on Friday.

Retail sales, a barometer of consumer demand and Russia’s key economic driver, rose 34.7% in year-on-year terms, the statistics service Rosstat said, beating a 23% increase forecast in a Reuters poll of analysts.

In month-on-month terms, they were up 0.3%.

Rosstat also said Russia’s real wages, adjusted for inflation and reported one month later than other indicators, rose 1.8% in March, below a Reuters poll foreseeing 2.1%.

Russia’s commodity-dependent economy is on the mend after a 3% contraction in 2020, its sharpest in 11 years, when lockdown restrictions stifled economic activity.

President Vladimir Putin, speaking at the St Petersburg International Economic Forum on Friday, said Russia’s economy and employment were close to returning to pre-pandemic levels.

Putin ordered that Russia’s anti-crisis mortgage programme be extended by one year to July 2022, saying state-sponsored aid to support the construction sector and households could not be stopped abruptly.

Economic growth and a recovery in living standards in Russia are a crucial issue for Putin and the United Russian ruling party. The latter is bracing for parliamentary elections in September after protests rocked streets earlier this year.

But some government officials have suggested withdrawing from anti-crisis policies, pointing at economic risks.

Finance Minister Anton Siluanov on Thursday said Russia’s recovering economy was at risk of overheating, calling for normalising fiscal and monetary policies after authorities slashed rates to a record low 4.25% last year and stepped up budget spending to address the COVID-19 crisis.

High inflation has prompted the central bank to raise rates twice this year, to 5%, making lending more expensive. The key rate is widely expected to be further raised to 5.25% next week, a Reuters poll of analysts showed.

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