Cbank expects Russia’s GDP to grow 0.9–1.3% in April–June

MOSCOW, Jun 16 (PRIME) -- The central bank expects Russia’s gross domestic product (GDP) to rise about 0.9–1.3% on the year in April–June, the regulator said on Friday in its report on monetary policy.

“Gradual restoration of consumer demand as well as favorable dynamics of investment activity will help the economy grow,” the regulator said, adding that the policy of fiscal consolidation will maintain state finances and will not restrict further restoration of the economy.

Annual consumer inflation will remain at April levels in the next coming months. Unfavorable weather conditions in several Russian regions may hurt harvest forecasts and delay harvesting, which will cap price growth for fruit, vegetables and other food, the authority said.

“On the other hand, higher prices will be restrained by active development of greenhouse farms and by lifting of the embargo on imports of fruit and vegetables except tomatoes from Turkey,” the central bank said.

The baseline forecast of the central bank is based on assumption that the Urals oil price will remain around the current levels until the end of 2017 supporting economic activity.

The forecast sees the Urals oil price at U.S. $50 per barrel in 2017, while expectations for 2018–2019 were improved to $42 from $40, and the price of $42 is seen in 2020. Expectations for 2018–2019 were adjusted after OPEC and non-OPEC states prolonged their oil production cut deal until the end of March 2018.

Higher oil production in the U.S. and restoration of oil output in Libya and Nigeria may hurt the prices, the regulator said.

Under the optimistic scenario, OPEC and non-OPEC states prolong the deal even after March 2018, and the Urals oil price rise to $55 in 2018 and further to $60.

The central bank also expects banks to increase crediting to a stable 7–10% a year in the mid-term as gradual restoration of economic activity will improve the quality of credit portfolios. If risks accumulate in some market segments, the regulator will eliminate them, including introduction of macroprudential measures. In 2017, lending may grow 5–7%.

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