Nabiullina expects the Russian economy to return to growth in the middle of the year

The Russian economy will move to growth in mid-2023, Chairman of the Central Bank of Russia Elvira Nabiullina said at a press conference.

“As for the dynamics of GDP, the quarter-to-quarter dynamics is already positive in the third and fourth quarters. If we talk about annual indicators, which, in our opinion, will move into a positive area of ​​​​GDP in the middle of this year, ”said Nabiullina (quoted by TASS).

On February 10, the Board of Directors of the Bank of Russia decided to keep the key rate again – as in September 2022, it is 7.5% per annum. The inflation rate last year was 11.9%, while the GDP decline was 2.5%. As explained in the press service of the department, inflationary expectations of business and the population for this year have decreased, but remain at an elevated level. The report also says that the dynamics of economic activity is better than the forecast, which the bank posted in October.

“The Bank of Russia will make further decisions on the key rate, taking into account the actual and expected inflation dynamics,” the press service added. At a press conference, Nabiullina noted that a rate hike this year is more likely than a cut.

Inflation growth rates are still moderate, the chairman of the Central Bank noted. According to Nabiullina, this is due to subdued consumer demand – large purchases such as real estate, cars and foreign trips have declined due to “changes in supply or high uncertainty” of the population.

She also mentioned reducing the risks of a global recession. According to the chairman of the bank, three factors contributed to the improvement – the opening of the Chinese economy after the removal of coronavirus restrictions, the proximity to raising rates in developed countries to reduce inflation, and falling prices in energy markets.