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German exports to Russia jump in first quarter despite sanctions

BERLIN, May 24 (Reuters) - German trade with Russia flourished in the first three months of 2017 due to a recovery of the Russian economy, despite sanctions imposed over Moscow's role in the Ukraine conflict still being in place, data showed in Wednesday.

German exports to Russia jumped 32 percent to 1.5 billion euros ($1.68 billion) compared with the first quarter of the previous year, while imports from Russia rose 35 percent to 2.1 billion euros, figures from the Federal Statistics Office reviewed by Reuters showed.

"The reason for the impressive start to the year is mainly the economic revival in Russia," said Wolfgang Buechele, chairman of the German Committee on Eastern European Economic Relations.

For the full-year of 2017, the committee now expects German exports to Russia to climb by at least 10 percent. This marked a clear improvement in expectations after the lobby group in January forecast an increase of at least five percent.

"Despite the sanctions, Russia is becoming an engine for overall German trade with Eastern Europe again," Buechele said, adding that the Russian economy was growing steadily because of rising oil prices and the stronger rouble.

He added that German companies apparently had come to terms with the fact that the sanctions imposed against Russia by the European Union and the United States in the course of the Ukraine conflict would remain in place for the time being.

Still, the sanctions were putting the brakes on overall trade volumes, Buechele said, adding that Russia was now seeking to replace imports with domestic production.

That's why German companies increasingly decide to invest in Russia, Buechele said. ($1 = 0.8945 euros) (Reporting by Michael Nienaber and Gernot Heller; Editing by Gareth Jones)