Oil-rich Russia revises GDP growth estimate higher

March 20 (UPI) -- As crude oil prices recover from last year's historic decline, the Russian finance minister said the outlook for gains in gross domestic product have improved.

Russia last year was producing oil at or near post-Soviet highs. According to economists at the Organization of Petroleum Exporting Countries, Russian oil companies were winning out because a decline in the value of the ruble made it economic to produce more oil for more revenue.

Finance Minister Anton Siluanov said the ruble was overvalued at the moment. Looking ahead, growth in gross domestic production should settle between 1.5 percent and 2 percent, an improvement from previous estimates.

"On the whole we agree that the economy will be growing faster than initially expected," he was quoted by Russian news agency Tass as saying. "Previously the outlook for this year was 0.6 percent."

Russia's currency lost considerable value at the start of last year and the broader economy faced dual strains from lower crude oil prices and economic sanctions imposed after the 2014 annexation of the Crimean Peninsula from Ukraine. Russia's economy relies heavily on revenue from crude oil exports to the European and Asian markets

David Lipton, a deputy director at the International Monetary Fund, told TASS in January that economic planners at the Kremlin had to prepare for best-case and worst-case scenarios for an economy that relies heavily on oil revenue.

Russia is a party to multi-player agreement to trim production this year in order to offset the supply-side strains that pulled oil prices below $30 per barrel in early 2016. Russia has been a strong supporter of the production arrangement, though its actual compliance has come into question

The head of Lukoil, the country's No. 2 oil producer, said last week it was "reasonable" to extend the production deal.