Page 21 - Russia OUTLOOK 2023

4% inflation target in 2024. The Russian economy is anticipated to shrink in
2022, but transition to growth by the second half of 2023 into 2024, finally
stabilising at 1.5-2.5% growth in 2025.

The “accelerated adaptation” scenario is even more optimistic, assuming a
large-scale global recession will be avoided, new economic ties will lead to
better import dynamics and Russian domestic demand will recover faster.
Under this scenario, inflation will reach the 4% target by the end of 2023 with
looser monetary policy.

The “global crisis” scenario, on the other hand, assumes that an increasingly
fragmented global economy will lead to a recession on the scale of the 2008
financial crisis. It also assumes that increasing geopolitical tensions will result
in new sanctions against the Russian economy. This will contribute to declining
Russian GDP in 2023 and 2024, with a 1% increase possible only in 2025.

Just a few days earlier, on October 28, the CBR Board of Directors elected to
maintain the key rate at 7.5%. This is the first time since the beginning of the
war that the rate has been left unchanged. The Bank explained that it expects
partial mobilisation to deter consumer demand and inflation in the next few
months. The CBR will hold its next key rate review meeting on December 16.

Russian GDP growth in 2023 forecasts

Alfa Bank

Sova Capital

Economic Development Ministry

CBR

World Bank

IMF

EBRD

Capital Economics 2.5%

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