Russia, the country of President Vladimir Putin, is still sacred. The central bank even boosted the country's economic growth.
The Bank of Russia kept its main interest rate at 7.5% at a regulator meeting Friday. The decline in inflation and the rapid growth of economic activity are the reasons.
"Economic activity grew faster than the Bank of Russia predicted in its February forecast," the regulator said in a statement, quoted from RT, Monday (1/5/2023).
This reflects the expansion of domestic demand and the ongoing process of transformation of the Russian economy... Rising domestic demand is supporting an improvement in business sentiment despite persistently challenging external conditions," he added.
The central bank also upgraded its inflation forecast for 2023. It previously expected prices to rise 5 to 7%, but now anticipates a more moderate rise of 4.5 to 6.5%. Expectations for 2024 remain unchanged at 4%.
"Current rates of price growth have increased since late 2022 but remain moderate, including within a steady inflation component. Household inflation expectations fell. However, they remain high, as do business price expectations," he said.
The regulator noted that it now expects Russia's economy to grow by up to 2% this year as the country is used to operating under tougher Western sanctions. Based on the previous scenario in February, the regulator expects a change in GDP from negative 1% to 1% for this year.
GDP growth forecasts for 2024 and 2025 remain unchanged. Each of 0.5 to 2.5% and 1.5 to 2.5%.
"This means that by the end of 2024 the Russian economy will reach the final level of 2021," the regulator added referring to the period before the start of Russia's military operation in Ukraine and subsequent Western sanctions.
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