Russia's gross domestic product (GDP) is projected to expand by 5.4 percent in 2011 and 5.7 percent in the following year, Nordea Bank said on Wednesday.

The bank said it expected consumer confidence and spending to recover on rising real wages and a low unemployment level, according to Russian news agency RIA Novosti.

Russia's economy expanded 4.1 percent growth in 2010.

Nordea, a Swedish financial services group operating in the Nordic and Baltic Sea regions, said inflation, which outstripped the credit and deposit rates, will help push consumers to opt for more spending.

Alongside domestic consumption, fixed capital investment is now recovering fast, and will be the key growth driver...That said, the reviving domestic demand will lead to increasing imports, which are set to rebound after the large drop during the crisis, helped by a stronger rouble, RIA Novosti quoted Nordea.

Russia's central bank is widely expected to start raising interest rates by the end of the first quarter this year, Reuters reported last month.