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Sunday, September 25, 2022



RUB - Russian Ruble



Expectations for GDP and income of Russians improved by the Ministry of Economic Development

The Ministry of Economy has improved most of the forecast indicators for 2022. The recession of Russia’s economy is now expected at 4.2% (against 7.8% projected earlier). The negative forecast for next year’s GDP, on the contrary, worsened to 2.7% against previously expected 0.7%.

The lower point of the decline is expected at the end of the Q1 / beginning of the Q2 in 2023. For 2024–2025, the Ministry expects an economic recovery of 3.7% and 2.6%, respectively, while reaching the pre-crisis level (an average GDP of 2021) is planned for the end of 2025.

Inflation estimates were also revised. Instead of the 17.5% by the end of 2022, the agency now predicts a price growth rate of 13.4% for the current year. The peak of the decline in consumer demand occurred in the Q2 2022. Thus, the ministry expects the demand will gradually recover within the next months, as a result of which deflation will end by the end of 2022 and so the annual inflation rates will be moderate.

In 2023, price growth, according to estimates, will slow down to 5.5%, then to 4.2% in 2024, with further return to the Central Bank’s inflation target of 4% in 2025.

The forecasts for real income of Russia’s population have also changed. Now the Ministry expects that the income will decrease by 2.8% by the end of 2022 (previous expectations were at minus 6.8%), furtherly increasing by 1.2%, 3.5% and 2% in the next three years, respectively.

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