Russian cbank sees 2016 GDP fall close to 0.3–0.7% low bound

MOSCOW, Sep 1 (PRIME) -- Russia’s gross domestic product (GDP) decline in 2016 will most likely be close to the low bound of the 0.3–0.7% range encompassed by the basic scenario, the central bank’s research and forecasting department said in a note Thursday.

“Under our estimates, a slow economic growth in the second half of the year remains the most probable scenario. In 2016, GDP dynamics will most likely be close to the low bound of the central bank’s forecast in basic scenario (decline of 0.3–0.7%),” the department said.

The central bank earlier estimated that GDP fell 0.2–0.4% in the second quarter.

The Russian government’s recent decision to make one-time 5,000 ruble payments to pensioners in January 2017 will accelerate inflation in the first quarter of 2017, the central bank also said.

“One-time payment of extra pensions of 5,000 rubles in January 2017 due to redistribution of expenditures from other budget items can lead to additional growth of prices by 0.15 percentage points in the first quarter of 2017, but on the whole this effect will be minimal,” the regulator said.

The payments will also accelerate GDP growth in the first quarter by 0.5 percentage points.

The extra pension payments will require 220 billion rubles from the budget, the central bank also said.

The central bank also said that the combined liquidity inflow to the banking sector amounted to 510 billion rubles from August 1 through August 25.

(65.2535 rubles – U.S. $1)

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