Stocks in Russia have risen to a 3-month high, even as the strength of its economy remains in doubt

A logo sits on display at the entrance to the headquarters of the Micex-RTS Moscow Exchange, in Moscow, Russia on January, 26,2016.
Russian stocks on the Moex Index in Moscow are rising.Sefa Karacan/Anadolu Agency/Getty Images
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  • Russian stocks have risen to their highest level since May, as a debate swirls about the country's economy.

  • The MOEX Index has risen this week, boosted by a jump in shares of energy giants Gazprom and Lukoil.

  • But the Moscow index is down around 30% for the year, with the economy under pressure from sanctions.

Russia's main stock index has risen to a more than three-month high as a debate swirls about the strength of the country's economy.

The MOEX index was up 0.7% Friday, according to Bloomberg data, at 2,462. It had earlier risen to 2,475, its highest level since the middle of May.

Energy giants Gazprom and Lukoil have both boosted the index, which is dominated by oil and gas companies, this week. Gazprom recommended paying an $0.84-per-share dividend for the first half, sending its stock up 25% on Wednesday.

Lukoil stock was on track to rise 12% over the week on Friday, with Reuters reporting that some analysts expect the company to start paying a dividend again.

The rally comes as economists debate the extent to which Russia has been able to weather sanctions put in place following Vladimir Putin's invasion of Ukraine in late February.

The stock market remains around 30% lower for the year, but the ruble has strengthened to above its February levels and oil exports have remained strong.

Analysts at JPMorgan said in a recent note that the economy was faring considerably better than initially expected. The bank said the economy will shrink 3.5% this year.

The consensus estimate of economists polled by Bloomberg is that Russian gross domestic product will drop 7.3% this year in a major blow to the economy. Yet analysts were predicting a 10% contraction in April.

Many economists are adamant that the economy is under severe pressure, and point to the huge drop in imports and the exodus of Western companies.

"Business retreats and sanctions are catastrophically crippling the Russian economy," a Yale University study, led by Professor Jeffrey Sonnenfeld, said in July.

Investors from "non-friendly" countries remain banned from buying and selling assets on the Moscow Exchange.

Read the original article on Business Insider