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Central Bank: the Russian economy is still adjusting to low oil prices

ЦБ: российская экономика все еще привыкает к низким ценам на нефть

Adjustment of the Russian economy to the low level of world commodity prices this year will continue, I believe in the Central Bank of the Russian Federation.

Earlier on Friday, the Board of Directors of the Bank of Russia took a decision to maintain the key rate at 11% per annum, explaining that, “despite some stabilization in the financial and commodity markets and slowing inflation, inflation risks remain high”.

At the same time the regulator predicts that “in 2016 the recession will slow down to 1,3-1,5%”. “In late 2016 — early 2017 is expected to release quarterly GDP growth in positive territory. Further development of processes of import substitution and expansion of non-oil exports will contribute to a gradual recovery in economic activity”, — is spoken in the comment of the press service of the Central Bank of the Russian Federation.

The regulator also specifies that “the risks of exceeding the inflation target at the end of 2017 (4% — ed.) are saved”. “They are associated with the following factors: possible deterioration in the oil market; long persistence of high inflationary expectations; the movement of world food prices; changing indexation rates of the administratively determined rates, wages and pensions, and uncertainty about achieving a balanced Federal budget in the medium term”, — emphasized in the Central Bank.

To achieve the inflation target, the Bank of Russia “could moderately tight monetary policy for a longer time than previously anticipated.”

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