UPDATE: Min: Russia’s GDP growth may exceed 2% forecast in 2017

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PETROZAVODSK, Jul 26 (PRIME) – Russia’s gross domestic product (GDP) growth will likely exceed the current forecast of 2% in 2017, as the economy has risen 1.6% in January–June and positive trends will strengthen in the autumn, Economic Development Minister Maxim Oreshkin told reporters on Wednesday.

“Our 2% (growth) forecast for the year already looks a bit conservative. We expect further strengthening of positive trends in the economy in the autumn. We see that wages and people’s incomes gradually start to recover – all these are positive trends which will only intensify now,” he said.

“Under our estimates, Russia’s GDP grew around 2.7% on the year in the second quarter. In the first half of the year economic growth is estimated at 1.6%.”

Interest rates are gradually falling helping banks to boost lending, including to small and medium-sized businesses, he added.

Russia’s inflation has started slowing after a leap in June caused by growth of fruit and vegetable prices amid cool weather and is already moving towards the forecast level of 3.8% for 2017, Oreshkin also said.

“Our inflation has risen a bit – to 4.4% (in annual terms in June), but this was a temporary effect from a later harvest of vegetables this year caused by not very warm weather at the beginning of the summer. The situation is currently improving, and we see that we will move to the inflation forecast that we had – 3.8%,” he said.

Inflation could be either a bit below or above the 3.8% forecast in 2017, and the ministry could slightly revise the outlook in August, he added.

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