Russia's current inflation trajectory is lower than that forecast by the government and the Central Bank of Russia (CBR) for 2025, the question is whether the GDP growth rate, which was 1.1% in January-July, is sufficient, President Vladimir Putin said at a meeting on the economy, as per Interfax.
"According to data from the Economy Development Ministry, Russia's GDP grew 0.4% year-on-year in July and 1.1% in the first seven months of this year. The question is, is this sufficient? Is this what we wanted? Are we succeeding in completing the task we set ourselves? Or do we need some kind of other measures and higher rates, obviously whilst ensuring macroeconomic inflation stability, taking into account the measured policy of the Central Bank," the president said.
"In terms of inflation, the trend here is fairly pronounced. While in July consumer prices rose 8.8% [year-on-year], in August [they rose] 8.1%. Now, the downward trajectory of inflation is lower than the government and Central Bank forecasts," Putin said.
"In other words, efforts to lower inflation are yielding results. It's very important that the moderate price situation has a positive impact on business and investment activity, makes it possible to ensure more dynamic, sustainable growth," Putin said.
He said "we must not just keep up with the global economy, but strive to outpace its dynamic by unlocking the innate potential of industries, regions and territories, developing ties with foreign partners, by widely introducing advanced technologies, mastering new promising areas of the modern economy."
He recalled that last year "we said, discussed everything that is taking shape in our economy, talked about the need to take the necessary measures to fight inflation, to strengthen macroeconomic stability."
"We agreed that this will inevitably lead to the cooling of the economy, to its soft landing, as we said at the time. And the general opinion was also that it was necessary to walk this fine line, both not undermine macroeconomic policy and not overcool, not freeze the economy," Putin said.
The CBR lowered its inflation forecast for 2025 to 6-7% from 7-8% in July. The Economic Development Ministry forecast in April that inflation in Russia would be 7.6% in 2025, but will present a revised, clearly lower forecast in the next few days.
The consensus forecast of economists polled by Interfax at the beginning of September is that inflation will be 6.4% in 2025 and slow to 4.7%, which is down from the 6.6% and 4.8% forecast a month earlier.
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