The Russian ruble turned negative against the US dollar on Tuesday, despite decent economic data. Financial analysts have been bullish on both the ruble and Russia’s economy this year, citing rising energy commodities and conservative monetary policy. But with geopolitical concerns still weighing on the Eastern European powerhouse, could the slightest deterioration in US-Russia relations significantly hinder Moscow?

According to the Federal State Statistics Service (FSSS), industrial production surged 7.2% year-over-year in April, beating the median estimate of 6.5%. This represented the second consecutive monthly gain and the best performance since November 2010, led by rising output for manufacturing, water supplies, and utilities. The extraction of raw materials slipped 1.8%, although this was better than what the market had anticipated.

On a monthly basis, industrial output fell 4.5%.

On the labor front, Russia’s unemployment rate edged down for the sixth straight month, coming in at 5.2% in April. This was better than what most economists had forecast. The jobless rate was also the lowest since March 2020, but it remained above pre-pandemic levels.

As of April 2021, 3.898 million people remain unemployed, down 159,000 from the previous month.

Meanwhile, the latest data from Rosstat highlighted that the national economy contracted by 1% in the first quarter of 2021, which was the best quarterly performance for the economy since the start of the COVID-19 public health crisis. Despite the decline, Russia’s Ministry of the Economy forecast that March 2021 was the first month of positive economic growth.

Inflation remains a contentious issue for Moscow, something that the Bank of Russia has attempted to combat with policy tightening. Still, Economy Minister Maxim Reshetnikov is looking at other measures the government could employ to rein in higher prices for food and commodities. This could include curbing strong food exports, even as the government “significantly increased” export duties.

Russia is predicting that inflation will stand at 4.3% at the end of the year.

The USD/RUB currency pair rose 0.05% to 73.4862, from an opening of 73.4499, at 17:07 GMT on Tuesday. The EUR/RUB climbed 0.23% to 89.95, from an opening of 89.81.