Russia has finally returned to growth

Russia has finally returned to growth.

The economy grew by 0.3% year-over-year in the fourth quarter of 2016 after shrinking by 0.4% in the third, according to the Federal Statistics Service.

This marks the first time Russia has seen positive growth in year-over-year terms since the fourth quarter of 2014.

The Russian economy contracted by 0.2% over the full year.

Looking beneath the headline figure, the improvement was due to the recent lighter declines in consumer spending and stronger inventory investment, said William Jackson, senior emerging markets economist, at Capital Economics, in a note.

“These trends are likely to continue in the coming quarters and we expect growth to be stronger than most anticipate both this year and next,” he added.

More recent economic data out of Russia has been mixed. On the positive side, the consumer price index (CPI) rose by 4.6% year-over-year in February, marking the lowest rate since June 2012.

However, industrial production slumped by 2.7% in February after growing by 2.3% in the prior month and construction fell by 4.5%. As for retail sales, although the first two months of 2017 have seen relatively smaller drops, they have still fallen for 26 consecutive months — a record.

The Russian ruble is down by 0.7% at 56.2834 per dollar as of 12:59 p.m. ET.

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