Central bank sees Russian Q2 GDP rise at 0.5–1%, Q3 at 0.8–1.3%

MOSCOW, Jun 24 (PRIME) -- The Russian central bank expects gross domestic product (GDP) growth to accelerate to 0.5–1.0% in April–June and to 0.8–1.3% in July–September from 0.5% in January–March, the central bank said in a report on Monday.

“The dynamics of economic activity in April 2019 demonstrated that annual growth of combined output will accelerate to amount to 0.5–1.0% under estimates. In the third quarter, as far the national projects are fulfilled and the state investment rises, the GDP growth will accelerate to 0.8–1.3%,” the central bank said.

Inflation may surge in July, as an agreement between the government and oil companies on fuel price retention ends.

The effect of a value-added tax (VAT) rise on inflation in 2019 stands at 0.6–0.7 percentage points.

Retail lending is to slow down at the end of the year from 23.8% annually as of the start of May. “Taking into account gradual saturation of the retail market and measures of the central bank targeted at holding down excessive growth of some segments, we might expect retention of the current lending growth with subsequent slowing down by the year’s end,” the document read.

The debt burden of the Russian economy will pose no threat to the financial stability under the basic scenario in 2019–2021, although it will be growing, the central bank said.

The basic scenario of the central bank envisages retention of the sanctions against Russia in 2019–2021.

A risk scenario includes an oil price slide to U.S. $20 per barrel in July 2019–June 2020 and a later consolidation at $35 per barrel.

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