UPDATE4: Russian cbank improves 2015 GDP fall forecast to 3.7–3.9%

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MOSCOW, Dec 11 (PRIME) -- The Russian central bank has improved its forecast for the gross domestic product (GDP) contraction in 2015 to 3.7–3.9% from 3.9–4.4%, Chairwoman Elvira Nabiullina said at a news conference Friday.

The sharp phase of an economic slowdown is over, but it is early yet to speak about a stable positive trend, she said.

“In our point of view, we can speak about the sharp phase of an economic slowdown being over. In the third quarter, the GDP year-on-year contraction was not that strong as in the second quarter,” Nabiullina said.

Russia’s inflation will be close to the upper border of 13% in 2015 and is likely to slow down to 7.5–8% in January–March 2016 mostly due to a base effect, she said.

The central bank’s revised forecast implies inflation of 12.8–13.0% in 2015 compared to 12–13% projected earlier.

A ban on food imports from Turkey will lead to an additional growth of food prices of 0.5–1.1 percentage points in 2016, the regulator also said.

The central bank’s basic scenario implies an oil price of around U.S. $50 per barrel over the next three years, but the probability of oil prices remaining below that level has increased, Nabiullina also said.

The regulator believes oil prices will start gradually recovering already in January–March 2016.

With the implementation of the risky scenario, implying oil prices at $40 per barrel, Russia’s GDP may fall around 2–3% in 2016, Nabiullina also said.

The regulator has kept its forecast for GDP growth of 0–1% in 2017, but worsened its forecast for GDP growth in 2018 to 1.5–2.5% from 2–3% projected earlier.

The central bank expects that the government will curb a budget deficit within 3% of GDP even if oil prices are below $40 per barrel, she also said.

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