Nabiullina: Russia’s economy will return to pre-crisis levels next year

The Russian economy will fully return to pre-crisis levels as early as next year, said Central Bank Chairman Elvira Nabiullina at the press conferences following the meeting of the Board of Directors.

“According to our forecast, given the gradual replacement of external demand by domestic, the economy will fully return to pre-crisis levels next year,” she said.

Business activity in April, Nabiullina noted, increased in many basic sectors of the economy – in manufacturing, construction, retail, services and catering. The business climate indicator calculated by the Central Bank on the basis of monitoring enterprises, although it decreased in May, remains in the region of ten-year highs, she drew attention.

Speaking about new points of growth in “changing conditions”, the Central Bank Chairman drew attention to the development of domestic tourism, the growth of engineering in a number of regions, non-ferrous metallurgy and the chemical industry in Siberia, and ferrous metallurgy in the central part of the country and the Urals.

“In general, the dynamics of the economy is improving due to the components of domestic demand, which have fully recovered and continue to grow, replacing the share of exports in the structure of the economy,” the Central Bank Chairman noted.

At the same time, Nabiullina noted that now there are no signs of overheating of the Russian economy, but the risks of such a development of events exist. The head of the Central Bank also recalled that next year the regulator expects a return to the inflation target of 4%.

In April, Economic Development Minister Maxim Reshetnikov announced that the agency improved forecast for the Russian economy in 2023 from a decline of 0.8% (in the September forecast) to growth of 1.2%.

Later, the Bank of Russia also improved the forecast for the dynamics of Russian GDP: the regulator now expects the economy to grow by 0.5–2% in 2023, although back in February it expected a decline. Economists polled by the Central Bank at the end of May predict the growth of the Russian economy by 0.8% by the end of the year.