in 2024 we need to continue to maintain a tight monetary policy – Kommersant

The Central Bank (CB) of Russia sees the need to maintain tight monetary policy in 2024 to return inflation to the target of 4%. This was stated by Deputy Chairman of the Central Bank Alexey Zabotkin.

“In the last three months, we have undertaken a significant tightening of monetary policy and raised the rate to 13%. To return inflation to the target of 4%, it will probably be necessary to maintain a tight monetary policy over the next year,” Mr. Zabotkin said at parliamentary hearings in the Federation Council (quoted from “Interfax”).

He added that the Central Bank expects GDP growth of 0.5–1.5% next year. The forecast for the average key rate for 2024 is 11.5–12.5%. “At the same time, the growth of the banking system’s demands on the economy will be 7–12%, which means continued growth of credit in real terms with inflation at 4%,” said the deputy chairman of the Central Bank.

Adaptation and recovery growth of the Russian economy, as Alexey Zabotkin said, proceeded at a rapid pace in 2023. He also added that the weakening of the ruble exchange rate increases inflation expectations, and the main goal of the regulator is to ensure that domestic demand matches the capabilities of the economy.

Head of the Ministry of Economy Maxim Reshetnikov at the government hour in the Federation Council on September 25 named Tight monetary policy is a “risk” for the country’s economy. According to him, in the future it may hinder the attraction of investments and saturation of the domestic market.

At the end of September, the Central Bank published the “Main Directions of the Unified Monetary Policy” for 2024–2026. It corrects calculations for the base, “fragmentation” and “risk” macro-scenarios.

More details in the text “Kommersant” “And fifteen on the shoulder”.

Petr Buzlaev