Central bank sees economy returning to growth, adding 2.5% in 2026

MOSCOW, Aug 11 (PRIME) -- Transformation of the Russian economy will continue in 2024–2025, and the economy will return to a balanced growth of 1.5–2.5% in 2026, the central bank said in a report on the key monetary policy areas in 2024–2026 on Friday.

"Transformation of the Russian economy will continue. At the same time, its growth rate will be more moderate than in 2023 taking into account the end of the recovery growth phase. The Russian economy will return to the trajectory of a balanced rise of 1.5–2.5% in 2026," the statement read.

The central bank expects the gross domestic product to increase by 0.5–2.5% in 2024 and by 1–2% in 2025.

The authority would assess the necessity and time of cutting the inflation target after its stabilization near 4% and reduction of a general economic uncertainty.

The central bank also plans to continue improving its communications with the market, including disclosure of details of negotiations on the key rate dynamics.

In conditions of a floating ruble rate and in order to maintain stability, the central bank may carry out transactions on the foreign currency market in the Chinese yuan, it said.

In the new conditions, the ruble dynamics to a great extent depends on the balance of demand from importers for foreign currency and supply by the exporters, while capital flows are not as important, the ruler said.

Russia's limits on ruble transfers abroad are mutual, and their ease will be possible only on a mutual basis, the central bank said.

The authority separately said that it intended to split the standard mechanism of liquidity provision to banks to the core and additional in 2023. "The terms of fund raising by banks will depend on the goals of the transactions," the central bank said.

The central bank has higher fragmentation of the global economy and a global crisis comparable to the 2008 one in the risk scenarios.

"Possible further strengthening of fragmentation will be manifested in an attempt of countries to manufacture goods on their territories, restrict competitors’ access to technologies, build partnerships based on geographical proximity and geopolitical friendliness," the statement read.

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