Economic growth accelerates in early 2018

Economic activity keeps expanding; this is suggested by a sharply accelerated growth in January, notes the latest issue of Talking Trends, a bulletin by the Bank of Russia’s Research and Forecasting Department (R&F Department).

The economy has gained traction on a slow but sustainable growth path, backed by one-time tailwinds. The ongoing recovery of domestic demand amid rising real wages, positive consumer sentiment, and global economic developments together suggest that all prerequisites are in place for further growth of the Russian economy.

The bulletin’s authors note that inflation stabilised at 2.2% in February due to, among other things, temporary factors, and undershoots the Bank of Russia’s target. Though short-term proinflationary risks abated, the mid-term risks of an upward inflation deviation from 4% are still stronger than those of a downward deviation. As the temporary factors run their course and the Bank of Russia completes its transition to neutral monetary policy, inflation will approach 4% in 2019.

The views and recommendations expressed in the Bulletin do not necessarily reflect the official position of the Bank of Russia.