MOSCOW, May 28: Russia’s economy lost momentum in April after a strong start to the year, with data on Monday sho-wing growth in domestic consumption is now struggling to compensate for weak exports as the global economy deteriorates.

Gross domestic product expanded by 3.7 per cent year-on-year in April, the Economy Ministry said in its monthly economic report, a slowdown compared with 3.9 per cent growth in March.

The ministry also revised up its GDP growth figure for March, previously estimated at 3.2 per cent.

The latest figures confirm a slow but steady deceleration in the economic growth rate over recent months, after unexpectedly robust growth in the first quarter. In its report, the ministry estimated that GDP expanded 4.6 per cent in the first four months of 2012, below an estimate of 4.9pc growth in the first quarter made by the Federal Statistics Service earlier this month.

The ministry also said that seasonally adjusted fixed investment had fallen by 1.4pc  in March compared with April, while seasonally adjusted industrial output had declined by 0.1 per cent.

The economic deceleration was expected by analysts, following other recent data that also point to diminishing economic momentum.

“Some slowdown in April compared to March shouldn't be a surprise seeing as we saw some slowdown in retail sales, and the industrial production figures were sickly,” said Dmitry Polevoy, economist at ING in Moscow.

“We may have more negative surprises in investment in the months ahead... Overall confidence among private manufacturers is shaky, so investments may at least be delayed in anticipation of steps by the new government, and some resolution to the euro zone story.”

A new government was formed last week, following President Vladimir Putin's inauguration earlier this month. While Putin has called for measures to improve Russia's business climate, many questions about the new government's policies are still in place. The renewal of worries in the euro zone has had an even more damaging impact on investor confidence, hammering the Russian stock market and the rouble as a result of a fall in prices for oil and other export commodities.—Reuters