Page 33 - RusRPTJul21

the key rate of the Russian Central Bank, a WB report “Prospects for the development of the world economy” said.
The report says that in 2021 the economy is expected to grow by 3.2% in Russia, which will be positively influenced by strengthening domestic demand and an increase in the cost of energy carriers.
According to the report, a sustainable recovery is expected in 2022 as well. Against the backdrop of easing the effects of the pandemic and stabilizing commodity prices, GDP growth will be 3.2%.
Experts noted that the forecast is under pressure from factors such as the Bank of Russia’s rate hike from historically low values, as well as geopolitical tensions this year and US sanctions.
Earlier, the World Bank improved its forecast for Russia’s GDP growth this year to 3.2%. Growth of 3.2% is also expected in 2022. According to the March forecast of the World Bank, GDP growth in 2021 is expected to be 2.9%, and 3.2% in 2022.
The rise in inflation in Russia in recent weeks and the CBR’s belated response moved BCS GM to slightly change its YE forecasts for the CPI and the key rate. We raised our YE21 inflation estimate to 5.5% y/y and, therefore, we now believe that the CBR will be forced to maintain a tight monetary policy until December: By year-end, the key rate may reach 5.75-6% (v our previous 5.5% forecast).
The official CBR macroeconomic forecasts are here.
The CBR conducted a survey of the leading investment banks’ outlook in
May 2021. The main results were published on its website:
Inflation: the forecast for 2021 is 4.9%. In the later years, the inflation is close
to the Bank of Russia’s target.
Key rate: according to the analysts, the average key rate is going to stand at 5.2% per annum in 2021 and at 5.5% further on.
GDP: analysts expect the GDP growth of 3.5% in 2021. Thereafter, it is forecast to slow down to 2.4% and 2.2% in 2022 — 2023 and 2.0% thereafter.
Nominal wages: the expected growth for 2021 is 7.1%. In 2022-2023, the growth rates will decelerate to 6.5% and 6.3%, respectively.
CDS-spread: according to analysts’ estimates, the country risk will decrease. The average 5-year CDS spread for Russia will shrink from 100 bps in 2021 to 90 bps in 2022-2023.
33 RUSSIA Country Report July 2021 www.intellinews.com