Russian Economy Ministry increases 2021 GDP and inflation forecast
MOSCOW, July 9 (Reuters) – The Russian Economy Ministry has raised its outlook for economic growth and oil prices in 2021 and is now considering a stronger ruble, and it has also raised inflation expectations for this year , indicated Friday the provisional set of forecasts of the ministry. .
After declining 3% in 2020, its sharpest contraction in 11 years, the Russian economy has recovered thanks to a rebound in consumer demand and high prices for oil, its main export, resulting in a series of improvements in its economic outlook.
The Economy Ministry revised its outlook for gross domestic product growth for 2021 to 3.8 percent, down from the 2.9 percent it forecast in its previous round of forecasts in April.
“We are seeing that the economy is recovering faster than expected … Our experts say that the potential for economic recovery is not yet exhausted,” said an official from the Ministry of the Economy.
The ministry raised capital investment growth forecasts for 2021 to 4.5% from 3.3%, while improving its view on an average price of a barrel of Russian crude from the Urals to $ 65.9 against $ 60.3 URL-E.
The Ministry of the Economy has also raised its consumer inflation forecast for 2021 to 5%, from 4.3%.
Stubbornly high inflation was behind the central bank’s decision to hike rates three times this year.
Inflation, the bank’s main area of responsibility, exceeded the 4% target at the end of 2020 and reached 6.5% in June, its highest since August 2016.
The central bank is now expected to raise its key rate again by 5.5% on July 23.
The Economy Ministry also revised its forecast for the average ruble rate for this year to 72.8 per dollar from 73.3 in April. This predicts the ruble to appreciate from the around 75 levels seen on Thursday.
“We all realize that the price of the ruble should be different from oil prices of $ 75 a barrel,” the ministry official said, attributing the current weakness of the ruble to the risk of sanctions and the uncertainty surrounding the deal. OPEC + on world oil production. (Reporting by Darya Korsunskaya; Writing by Andrey Ostroukh; Editing by Hugh Lawson)