GDP growth accelerates against lower inflation

The recovery of economic activity in Russia attains stability with GDP growth in 2017 Q1 estimated to be at 0.4-0.7%, according to the February issue of the information and analytical commentary ‘Economy: Facts, Estimates and Comments.’

A steadier than expected recovery of the economic activity does not produce any additional inflation pressure. A preliminary assessment of the weekly statistics in February shows that inflation slows down a little bit faster than expected. Under these circumstances, there exist chances to reduce the key rate in 2017 H1 although they are still restrained by inflation risks, the commentary states.

In January, the industrial output grew both year-on-year and against December 2016 statistics. The investment activity gained strength. A better economic environment and lower inflation added to higher real wages which paves the way for a step-by-step recovery of consumer activity. The rates of such recovery do not exceed the growth of production, hence this does not exert any additional price pressure.