The head of the Bank of Russia, Elvira Nabiullina, said that quarterly GDP growth in annual terms will begin in mid-2023. According to her, lending to companies in banks is growing at a double-digit pace. The head of the Central Bank said that inflation in Russia in January was likely the highest since April 2022.
“As for the dynamics of GDP, quarterly dynamics are already positive in the third and fourth quarters. If we talk about annual indicators, then, in our opinion, GDP will move into the positive area in the middle of this year. As for the overall assessment of GDP for this year, we give a symmetrical range from minus 1% to plus 1%,” said Ms. Nabiullina at a press conference (quoted by Interfax).
According to her, the improvement in the Central Bank’s forecast for the dynamics of Russia’s GDP in 2023 is due to the refinement of estimates for previous periods and an increase in budget spending compared to October estimates.
Elvira Nabiullina noted that structural changes in the economy are manifested in a steady increase in output in some sectors and its reduction in others.
“The former include, for example, certain industries and construction, which are increasing volumes. The transport infrastructure is developing rapidly, where public investment is playing an increasingly important role,” she said.
On February 10, the Bank of Russia left the key rate at 7.5% for the third time in a row. The regulator will make further decisions on the key rate, taking into account inflation dynamics. According to the Central Bank forecast, annual inflation will be 5.0-7.0% in 2023 and 4% in 2024. According to the results of 2022, the regulator estimated the decline in GDP at 2.5%. According to the regulator’s forecast, the GDP growth rate will be -1-1% in 2023 and 0.5-2.5% in 2024. In 2025, the GDP indicator will grow by 1.5–2.5%.