Cbank says quarterly GDP rise to accelerate to 0.4% April–June

MOSCOW, May 13 (PRIME) -- Russia’s quarterly gross domestic product (GDP) growth will accelerate to 0.4% in April–June from 0.2–0.3% in January–March, according to a report by the research and forecast department of the central bank released on Monday.

“Economic growth acceleration prospects have improved: starting from the second quarter the growth rate will stand at about 0.4% on the quarter in seasonally adjusted terms, and will reach its potential,” the department said.

The central bank also reduced its January–March GDP growth estimate to 0.2–0.3% from 0.3%.

The central bank estimates annual GDP growth in January–March at 1.0–1.5%, and for the whole year at 1.2–1.7%.

The bank said that the possibility that inflation will slow down to the target of 4% in January–March 2020 has increased.

“The consumer price dynamics and the current level of inflationary pressure in the economy point to a higher possibility that inflation will slow down to 4% in the first quarter of 2020,” it said.

“Temporary disinflation factors, including the firming ruble, favor this. Short-term pro-inflation risks, including those linked with value-added tax (VAT) have fallen.”

A preventive hike of the key rate in the second half of 2018 has reached its goal, but medium-term risks of inflation exceeding 4% still predominate, the authority said.

“Annual inflation has passed its peak at a lower than expected level thanks to the strengthening factors that curb the price growth temporarily – the firming ruble and falling diesel fuel prices,” the central bank said.

“The VAT effect on the consumer price growth has ceased to be traced in statistics, pointing, in part, to the absence of significant indirect factors.”

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