13.11.2024, 11:57
Russia predicted the inevitable cooling of the economy
Source: OREANDA-NEWS
OREANDA-NEWS By now, a number of sectors of the Russian economy are experiencing a decrease in business activity and a deterioration in financial indicators, which in the medium term will lead to an inevitable cooling of the GDP growth rate of the Russian Federation in the first half of 2025. This is reported by Kommersant with reference to the forecast of analysts at the Institute of National Economic Forecasting of the Russian Academy of Sciences (INP RAS).
Experts stressed that the deterioration of financial and business activity is now increasingly evident in key sectors of the Russian economy. We are talking, in particular, about the construction, metallurgical sectors, as well as the segment of mining and sales of trucks. According to analysts, such dynamics may indicate the formation of trends in output reduction in the investment and stock sector and the segment of structural materials.
INP RAS explained the deterioration of the situation in the above-mentioned industries by the continued tightening of the monetary policy (DCP) of the Central Bank and a noticeable increase in enterprise costs, including an increase in employee salaries, logistics tariffs and housing and communal services (utilities), as well as problems with conducting monetary transactions due to increased sanctions pressure from Western countries.
All this, as experts emphasize, is happening against the background of an increase in turnover of Russian companies in the first eight months of 2024. Such a situation, according to analysts, indicates a decrease in the profitability of production in a number of industries and "in the economy as a whole", which ultimately may lead to a deterioration in the situation with the solvency of domestic industrial enterprises and, as a result, to an inevitable slowdown in the growth rate of Russian GDP.
The Central Bank (CB) has previously reported on the gradual slowdown in the dynamics of the Russian economy. The regulator recorded a decrease in growth rates in the second quarter of 2024. The Central Bank attributed a number of factors to the main reasons for such dynamics, including the deterioration of the situation with external demand for domestic products, as well as the increase in supply-side restrictions due to staff shortages and lack of production capacity. These circumstances eventually increased inflationary pressure on the Russian economy, against which the Central Bank's leadership had to sharply raise the key rate to a record level of 21 percent. The regulator also raised its inflation forecast for 2024 to 8-8.5 percent. In the current crisis conditions, it is premature to move to the weakening of PREP, as emphasized by the regulator.
Experts stressed that the deterioration of financial and business activity is now increasingly evident in key sectors of the Russian economy. We are talking, in particular, about the construction, metallurgical sectors, as well as the segment of mining and sales of trucks. According to analysts, such dynamics may indicate the formation of trends in output reduction in the investment and stock sector and the segment of structural materials.
INP RAS explained the deterioration of the situation in the above-mentioned industries by the continued tightening of the monetary policy (DCP) of the Central Bank and a noticeable increase in enterprise costs, including an increase in employee salaries, logistics tariffs and housing and communal services (utilities), as well as problems with conducting monetary transactions due to increased sanctions pressure from Western countries.
All this, as experts emphasize, is happening against the background of an increase in turnover of Russian companies in the first eight months of 2024. Such a situation, according to analysts, indicates a decrease in the profitability of production in a number of industries and "in the economy as a whole", which ultimately may lead to a deterioration in the situation with the solvency of domestic industrial enterprises and, as a result, to an inevitable slowdown in the growth rate of Russian GDP.
The Central Bank (CB) has previously reported on the gradual slowdown in the dynamics of the Russian economy. The regulator recorded a decrease in growth rates in the second quarter of 2024. The Central Bank attributed a number of factors to the main reasons for such dynamics, including the deterioration of the situation with external demand for domestic products, as well as the increase in supply-side restrictions due to staff shortages and lack of production capacity. These circumstances eventually increased inflationary pressure on the Russian economy, against which the Central Bank's leadership had to sharply raise the key rate to a record level of 21 percent. The regulator also raised its inflation forecast for 2024 to 8-8.5 percent. In the current crisis conditions, it is premature to move to the weakening of PREP, as emphasized by the regulator.
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