MOSCOW, July 12. /TASS/. Russia’s GDP adjusted to seasonality added 0.7% in Q2 2023 due to expansion of private demand and high budget injections into the economy, the Central Bank said in a note on Wednesday.

"Due to further expansion of private domestic demand and maintained high budget injections into the economy higher rates of GDP growth of Q1 (+0.7% quarter-on-quarter SA [seasonally adjusted]) persisted in Q2," the regulator said.

Growth of domestic, including state demand for products of the manufacturing sector acted as one of the main positive factors of economic dynamics in Q2. The largest contribution to growth was made by groups of goods on investment and consumer demand.

The situation in output also stabilized. "Amid Russia’s extension of voluntary oil output reduction by 0.5 mln barrels per day by the end of 2024 further dynamics in the sector in the mid-term will be largely defined by demand for other commodities (coal, metals). Moreover, in late summer the temporary negative contribution to the output indicator will be made by additional voluntary reduction of oil supplies to foreign markets by another 0.5 mln barrels per day," the Bank of Russia explained.

The improvement of consumer sentiment and growth of economic activity in the past few months was backed by stable growth of consumption and changes in the behavior strategy to an increase in variety of goods acquired, gradually moving away from the economy effort. As a result, sustainable growth rates are demonstrated both by everyday consumption and expenditures on durable goods, on which pent-up demand formed in 2022.