Russia’s economy is poised for the “biggest bounce” in the world this year as companies rebuild stocks and resurgent consumer demand boosts output after a record slump in 2009, Bank of America Merrill Lynch said.

The economy of the world’s biggest energy supplier will grow 7 percent this year, David Hauner, head of emerging-market economics at the largest U.S. bank, said in a report published Thursday, raising a previous estimate for 5 percent expansion. The economy contracted a record 7.9 percent last year.
“Russia leads by a wide margin,” Hauner said. “A 7 percent GDP call for Russia looks aggressive, but is it? The comparison with the 1998-2000 episode suggests our revised forecast remains conservative.” Russia’s output won’t match its pre-crisis peak until the first quarter of 2011, according to the report.
Surging demand for commodities and companies’ efforts to stabilize inventories stoked a rebound that’s helping to pull the economy out of its worst contraction since the Soviet Union collapsed in 1991. Finance Minister Alexei Kudrin warned this month the central bank may need to halt interest rate cuts as inflationary pressures resurge.
On a seasonally adjusted basis, Russia’s GDP gained 6.5 percent in the first quarter from the previous three months, BofA Merrill estimates.
This year’s recovery will follow what President Dmitry Medvedev has called the “hardest year” since Russia’s 1998 default.
(Source: Bloomberg)