MOSCOW, May 5 (Reuters) - Russia's service sector growth accelerated in April, showing its strongest reading since December thanks to a rise in new business on the back of high oil prices, data showed on Thursday.
The HSBC purchasing managers' index (PMI) for the services sector rose to 55.8 in April, up from 53.3 in March, edging closer to a seven-month peak of 56.4 seen in December.
The index remained above the 50.0 mark that separates expansion from contraction.
"April PMI data have finally revealed a marked improvement in business activity in services," said Alexander Morozov, chief economist for Russia and the Commonwealth of Independent States (CIS) at HSBC.
"Moreover, the gain has been strong enough for an acceleration in overall economic growth, despite a weaker expansion in manufacturing."
HSBC said that hotels and restaurants, as well as financial intermediation were the fastest-growing areas last month, signalling a return of pre-crisis private consumption trends.
"These should sustain growth momentum in the sector in the short term. We attribute these developments to the recent surge in oil prices and keep expecting an entrenchment of this trend going forward," Morozov added.
HSBC also said that employment increased at the strongest rate in over three years, reflected in salary rises, seen as a driver of higher input costs along with taxes, rents and fuel. The employment sub-index rose to 53.2 from 52.6 in March.
"Apart from taxes that are policy-driven, the rest looks pretty much the same mix that Russia had before the crisis. In that case, the resumption of policy tightening would be justified," Morozov said.
Inflation remains one of the greatest issues plaguing Russia's recovery from the financial crisis and is high on the list of voters' concerns ahead of parliamentary elections in December and presidential elections in March 2012.
The central bank raised key rates last Friday, surprising markets with a broad tightening move and signalling it is ready to let the rouble rise to curb inflation, which it wants to keep in a 6 to 7 percent range.
The central bank warned that future decisions will have to balance out the needs to tame inflation, spur economic growth and avoid excessive rouble appreciation. (Reporting by Katya Golubkova, editing by Stephen Nisbet)