FILE PHOTO - A view of Moscow's Kremlin, Ministry of Foreign affairs and Moscow City business district on October 18 2011. REUTERS/Anton Golubev

MOSCOW (Reuters) - The Russian economy grew 1.8 percent year-on-year in the third quarter of 2017, the Federal Statistics Service said on Monday.

That was slower than in the second quarter, when the economy grew 2.5 percent, its best annual rate since the third quarter of 2012.

“The year-on-year growth rate was depressed by the fact that there was one fewer working day in Q3 this year than in Q3 2016 – something Rosstat doesn’t adjust for,” research firm Capital Economics said in a note.

The 1.8 percent expansion in gross domestic product is a preliminary reading and could be revised later this year when the Federal Statistics Service, or Rosstat, provides a detailed breakdown of economic growth factors.

Following the data release, Capital Economics said it was lowering its growth forecast for 2017 to 1.8 percent from a previously expected 2.3 percent.

The Russian economy is recovering from a full-blown crisis caused by a massive drop in prices for oil, its key export, and by economic sanctions imposed by the West over Moscow’s role in the Ukraine crisis.

Analysts polled by Reuters in late October had on average expected 2017 GDP growth of 1.8 percent after two consecutive years of contraction.

Officials are more upbeat on Russia’s economic prospects, saying GDP could expand by more than 2 percent in the whole of 2017.