MOSCOW, June 15 (Reuters) - Russia on Tuesday revised up its first-quarter gross domestic product (GDP) assessment to a contraction of 0.7% year-on-year from a 1% decline, adding weight to assertions that the economy is close to returning to pre-crisis levels. The COVID-19 pandemic paralysed business activity and caused the economy to shrink by 3% in 2020, prompting the central bank to slash interest rates to a record low 4.25%, while a drop in global oil prices dented Russia’s revenues. The figures published on Tuesday by the Federal Statistics Service Rosstat showed a marked improvement on the 1.8% year-on-year drop in the final quarter of 2020. The central bank expects the economy to return to its pre-crisis level this quarter. Governor Elvira Nabiullina on Tuesday said the central bank, which hiked its key interest rate to 5.5% on Friday, will continue raising interest rates in response to rising inflation and does not expect this to hinder economic growth. Rosstat said the improvement in the GDP figure was down to slight improvements in industrial output and wholesale trade turnover, and obtaining extra data from companies and the central bank. (Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Alex Richardson) Our Standards: The Thomson Reuters Trust Principles.