All news

Central Bank sees risks of some slowdown in business activity in 2019

However, the regulator does not rule out a more rapid economic growth in the medium term

MOSCOW, June 15. /TASS/. The Russian Central Bank sees the risks of some slowdown in business activity in 2019, but does not rule out a more rapid economic growth in the medium term, according to the Central Bank’s press release published on Friday after the board meeting.

According to the Central Bank, there is a risk of some slowdown in business activity in 2019. However, if the planned measures are successfully implemented in the medium term, the economy will grow faster than the current forecast of the regulator.

At the same time, the regulator in the medium term expects a faster growth of the Russian economy in case of successful implementation of the planned fiscal measures.

According to the forecast of the Central Bank, Russia's GDP growth in 2018 will be 1.5-2%, and in 2019-2020 the economic growth rates will remain around these levels.

"The Bank of Russia’s forecast might be further updated to reflect a detailed estimate of influence that the set of fiscal measures, announced on 14 June 2018, will have on economic performance. Although in the medium term if the scheduled measures are successfully implemented the expected economic growth could be faster compared to the Bank of Russia’s baseline forecast," the regulator said.

On Friday, the Bank of Russia kept the key rate at 7.25% per annum after the government announced plans to raise VAT and the growth in gasoline prices outstripping inflation in May.

The balance of risks up to the end of 2019 has shifted towards proinflationary risks. The main risks are related to the effects of the adopted tax and fiscal policy decisions and to external factors, the regulator said.

At its previous meeting of the Board of Directors on April 27, the regulator kept the rate unchanged, noting that further decisions would depend on the level of inflation risks, the dynamics of consumer price growth and the pace of economic development in comparison with the forecast.