Central Bank of Russia presents its forecast for economy development for next 3 years

The Bank of Russia (Central Bank) has published the draft Guidelines for the Unified State Monetary Policy for 2023–2025, Report informs referring to the message of the regulator.

The document presents scenarios for the development of the economy for the next three years in terms of the main indicators - inflation, GDP, and the key rate.

The main goal of monetary policy in the report is to maintain inflation near 4% permanently. According to the Central Bank, taking into account the structural restructuring of the economy necessary after the events of the beginning of 2022, reaching this indicator will require more than 1.5 years and will end in 2024. To achieve it, the Bank of Russia will adjust the key rate.

The Central Bank reminded that after raising the key rate to 20% in February, by the end of July, the key rate was reduced to 8.0% per annum. The Bank of Russia will assess the feasibility of reducing the key rate in the second half of 2022.

The average key rate in 2023, according to the forecast of the regulator, will be 6.5-8.5%, in 2024 - 6-7%.

The regulator continues to estimate the long-term neutral key rate at 1-2% in real terms and 5-6% in nominal terms.

As for GDP, in 2022 the indicator will be negative (from -6% to -8%), as in 2023 - (from -4% to -6%), in 2024 the indicator will reach a positive value of 1.5 -2.5%. The same level is predicted for 2025.