26.07.2024, 14:48
Russia's economic growth forecasts have been assessed
Source: OREANDA-NEWS
OREANDA-NEWS The Central Bank of Russia (CB) has raised its forecast for Russia's GDP growth in 2024. Interfax provides an assessment of the growth of the Russian economy.
The regulator has changed the GDP growth forecast from 2.5-3.5 percent to 3.5-4 percent. However, the growth estimate for 2025 and 2026 decreased from 1-2 percent to 0.5-1.5 percent and from 1.5-2.5 percent to 1-2 percent, respectively. In 2027, the Central Bank expects growth of 1.5-2.5 percent. This assessment is explained by the growing rigidity of the labor market.
"The Russian economy continues to grow at a rapid pace. Consumer activity remains high against the background of significant growth in household incomes and confident consumer sentiment. Significant investment demand is supported by both budgetary incentives and high company profits. The upward deviation of the Russian economy from the trajectory of balanced growth is not decreasing," the representatives of the Bank of Russia explained.
According to analysts, there is also an increasing shortage of labor resources in the country. Against this background, the growth of domestic demand does not lead to a corresponding expansion of the supply of goods and services, but only to increasing costs for companies and increased inflationary pressure.
Following the meeting of the Board of Directors on July 26, the Bank of Russia raised the key rate to 18 percent per annum. The decision was explained by rising inflation, rising inflation expectations and maintaining a high level of lending. These trends indicate an increased overheating of the economy, the regulator explained.
The Central Bank's forecast for price growth in 2024 has also been changed — from 4.3-4.8 percent to 6.5-7 percent. For 2025, the forecast has deteriorated from 4 to 4-4.5 percent.
The regulator has changed the GDP growth forecast from 2.5-3.5 percent to 3.5-4 percent. However, the growth estimate for 2025 and 2026 decreased from 1-2 percent to 0.5-1.5 percent and from 1.5-2.5 percent to 1-2 percent, respectively. In 2027, the Central Bank expects growth of 1.5-2.5 percent. This assessment is explained by the growing rigidity of the labor market.
"The Russian economy continues to grow at a rapid pace. Consumer activity remains high against the background of significant growth in household incomes and confident consumer sentiment. Significant investment demand is supported by both budgetary incentives and high company profits. The upward deviation of the Russian economy from the trajectory of balanced growth is not decreasing," the representatives of the Bank of Russia explained.
According to analysts, there is also an increasing shortage of labor resources in the country. Against this background, the growth of domestic demand does not lead to a corresponding expansion of the supply of goods and services, but only to increasing costs for companies and increased inflationary pressure.
Following the meeting of the Board of Directors on July 26, the Bank of Russia raised the key rate to 18 percent per annum. The decision was explained by rising inflation, rising inflation expectations and maintaining a high level of lending. These trends indicate an increased overheating of the economy, the regulator explained.
The Central Bank's forecast for price growth in 2024 has also been changed — from 4.3-4.8 percent to 6.5-7 percent. For 2025, the forecast has deteriorated from 4 to 4-4.5 percent.
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