Current economic growth may be slightly above Bank of Russia’s expectations

Economic activity has over the last months been showing stronger dynamics. Recent revisions in GDP conducted by Rosstat along with shorter-term macroeconomic indicators and survey data suggest that current economic growth may even slightly exceed Bank of Russia’s expectations. The latter conclusions are stated in ‘Talking Trends No. 1 (2017)’, a bulletin issued by the Bank of Russia’s Research and Forecasting Department.

According to recent model estimates, GDP growth may increase to 0.5-0.6 percent QoQ in seasonally adjusted terms in 2017Q2. Evidence for higher growth is largely supported by January’s PMI indices for Russia which have risen to a six-year high.

Inflation continues to decline in line with the Bank of Russia’s forecast, as this is partially attributed to Ruble appreciation. Analysts’ inflation forecasts for the end of 2017 have recently been decreasing towards the 4% target, as this reflects growing credibility of Bank of Russia’s monetary policy. Nevertheless, inflationary pressures still remain high, as stated in the Bulletin.

The views expressed in the Bulletin are solely those of the authors and do not necessarily reflect the official position of the Bank of Russia.