central bank

Russian Central Bank: Russia’s Further Economic Recovery Can Be Unstable

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Russia’s further gradual economic recovery may be unstable amid restrained consumer behavior, the Central Bank said in its report on monetary policy.

According to the Bank of Russia, further gradual economic recovery can be unsustainable due to the decline in income, restrained consumer behavior, cautious business sentiments, as well as restrictions on the part of external demand.

“Taking into account these factors, according to our forecast, GDP will decline by 4.5-5.5% this year,” the regulator said.

Earlier, head of the regulator Elvira Nabiullina noted that after a pandemic of a new coronavirus infection the Russian economy could recover in more than 1.5 years. At the same time, the regulator does not yet see the need for additional measures to support the economy. The Central Bank expects that the revival of the national economy will not “fizzle out” in the fourth quarter and the recovery will continue.

www.tass.com

Russia lowers most important interest rate

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The Russian Central Bank has announced an interest rate cut of 150 base points. That means the interest rate will be 12.5% from May 5 onwards, with the interest rate being 14% now. With this measure, the Central Bank is looking to stimulate economic growth. The bank is adjusting the interest rate for the second time this year. The rouble has been on the rise after the significant decline late last year, and the economy is also recovering. According to figures, the GDP, corrected for seasonal influences, decreased by 2.5% in January. The economic growth amount to -1% in February, and this growth figure had halved in March. The inflation is also decreasing slightly, amounting to 16.5%.

www.freshplaza.com

Cental Bank’s forecasts

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Russian Central Bank is anticipating a decrease of GDP growth by less than 1% in 2014.

“Right now we think that the realization of our economic growth forecast for 2014, which was made last year, is hardly probable. We had expected the growth to be 1.5-1.8%. Now, in our opinion, the rate of growth deceleration till less than 1% is most probable”, – Elvira Nabiullina, the head of Russian Central Bank, said during the Association of Russian Banks conference.

According to Rosstat estimations, last year GDP of Russian Federation increased by 1.3%. This year Ministry of Economic Development is expecting a GDP slowdown till 1.8% in case of a capital outflow stabilization at the level of $60-70 billion. If the capital outflow is more than $100 billion, GDP growth will hardy be more than 0.6%. Concurrently, the official rate of GDP forecast remains at the level of 2.5%. It will be revised in the beginning of April.

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