The Central Bank Board of Directors decided to keep the interest rate at 7.5%. Online regulator. The figure has not changed since September 2022.
“Current price increases are increasing, but remain moderate in terms of sustainable components. Inflationary expectations of the population and businesses declined, but remained high. The dynamics of economic activity is better than the Central Bank of Russia’s October forecast. While the public is still cautious about consumer behavior, there are signs of recovery in consumer activity.
At the same time, pro-inflationary risks intensify due to the accelerated implementation of budget expenditures, the deterioration in foreign trade conditions and the current situation in the labor market.
The next meeting on the size of the key interest will be held on 17 March.
Elvira Nabiullina, Governor of the Central Bank of Russia statedHe said he did not consider the possibility of a rate cut at today’s meeting of the regulatory board. According to him, in the future, there are more prerequisites for raising the key rate than for lowering it.
“The probability of raising the key interest rate in Russia in 2023 exceeds the probability of lowering it,” he said.
In particular, the rate upgradable Reaching the 4% inflation target in the Russian market.
Thus, the regulator raised the key rate forecast for 2023 from 6.5-8.5% to 7-9%, and for 2024 – 6.5-7.5% (previously 6-7%).
GDP Forecast
According to the forecast of the Central Bank of Russia, GDP dynamics will turn positive in mid-2023.
“As for the GDP dynamics, the quarter-to-quarter dynamics are already positive in the third and fourth quarters. “If we talk about annual indicators, which, in our opinion, will move to a positive area of GDP in the middle of this year,” Nabiullina said.
In general, this year the indicator can vary from minus 1% to plus 1%, and in 2024 – 0.5-2.5%. In 2025, GDP will grow by 1.5-2.5%.
The Ural oil price forecast for 2023 was lowered from $70 to $55 a barrel in October.
high inflation
Nabiullina also said in January that inflation in Russia could be the highest since April 2022. There is no full inflation data for January yet.
“Weekly data shows that the current rate of price increase in January rose to the highest levels since April 2022, if you do not take into account the periods of indexation of regulated tariffs,” he said.
Despite the gradual acceleration of the current rate of price increase, annual inflation will decline in the coming months due to the base effect. In the spring, probably below 4% (currently – 11.8%).
The Central Bank Governor said, “This will not reflect the current inflationary picture, but will reflect the exit from the annual inflation calculation at high values, where the increase in prices peaked in March-April 2022.”
global risks
Nabiullina added that the risks of recession in the global economy have decreased significantly due to the improving weather in world markets.
In particular, the head of the regulatory agency identified three factors that made it possible to make a more optimistic forecast – the opening of the Chinese economy after the lifting of coronavirus restrictions, the closing of the Central Bank of Western countries raising key interest rates peaks as part of measures to combat inflation and lower energy prices.
The head of the Central Bank of Russia noted that the risk of imposing tougher sanctions against Russia is still high. At the same time, the Central Bank does not see any serious negative changes for the Russian economy for the current year.
“As for the assessment of the situation and prospects, in my opinion, in addition to the factor of increased export prices for Russian goods, the rapid adaptation of the economy and market assets played an important role in the stability of the Russian economy. . We do not see a serious negative result for 2023,” he said.