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High domestic demand intensifying deviation of Russian economy from balanced growth

It is reported that completion of the recovery phase means that its further growth will slow down due to supply-side constraints

MOSCOW, September 15. /TASS/. High domestic demand is intensifying the Russian economy’s upward deviation from balanced growth, while completion of economic recovery means that its further growth will slow down due to supply-side constraints, the Bank of Russia said in a press release published following its board meeting.

"Economic activity is growing across a wide range of industries. High domestic demand is intensifying the upward deviation of the Russian economy from the balanced growth path," the press release reads.

That said, completion of the recovery phase means that its further growth will slow down due to supply-side constraints.

"First of all, it concerns the labor market which is becoming tighter. Unemployment has dropped to a new historical low. Concurrently, low geographic and cross-sectoral labor force mobility is an additional structural constraint," the regulator said.

According to its revised outlook, GDP growth rates will total 1.5-2.5% in 2023, 0.5-1.5% in 2024, 1-2% in 2025, and 1.5-2.5% in 2026.

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