Page 33 - RusRPTAug23

CBR’s monthly macro survey for July results:
· Inflation: The median inflation forecast for 2023 was increased to 5.7% (+0.2 p.p to the June survey), for 2024 — to 4.3% (+0.3 p.p.). Analysts expect inflation to be on the target of the Bank of Russia in 2025.
· Key rate: Analysts raised the forecast for key rate path over the entire forecast horizon by 0.4–0.7 p.p. (7.9% per annum, 7.7% per annum and 6.6% per annum on average in 2023-2025 respectively. The median estimate for a neutral key rate is unchanged at 6.0% per annum.
· GDP: Analysts improved the GDP forecast for 2023 to +1.5% (+0.7 p.p.). The forecasts for 2024-2025 are in line with the June survey. According to analysts, the change in GDP in 2025 to 2021 will be +2.3% (+1.6% in the June survey). The estimate of the long-term GDP growth rate is unchanged at 1.5%.
· Unemployment rate: Analysts lowered the forecasts by 0.2–0.3 p.p. over the entire horizon and expect the unemployment to be in the 3.4–3.5% range.
· Nominal wages: The growth forecast for 2023 and 2024 increased to 10.0% (+0.3 p.p.) and 7.9% (+0.7 p.p.) respectively. Expectations for growth in 2025 are almost unchanged (+6.1%). Calculations based on analysts’ forecasts of nominal wages and average CPI suggest that real wages will increase by 4.2% in 2023, by 2.3% in 2024 and by 1.9% in 2025. Accordingly, by the end of the forecast horizon real wages will be by 9.3% higher than in 2021.
· Consolidated budget balance: No significant changes. Analysts’ forecasts of deficit for 2023-2025 are 2.7% of GDP, 1.8% of GDP and 1.0% of GDP respectively.
· Exports of goods and services: Forecasts are lowered to $495bn in 2023 (-$5bn), $505bn in 2024 (-$9bn) and $508bn in 2025 (-$17bn). As a result, according to analysts, the value of exports in 2025 will be by 7.6% lower than in 2021 (in the June survey — by 4.5%).
· Imports of goods and services: In contrast, forecasts for the import values are raised by $5-6bn: in 2023 import will be $380bn, in 2024 — $395bn, in 2025 — $406bn. Thus, analysts predict that the value of imports in 2025 will be by 6.8% higher than in 2021 (in the June survey — by 5.3%).
· USD/RUB exchange rate: Analysts expect weaker ruble over the entire horizon. Analysts’ forecast for 2023 — 81.8 rubles per dollar, for 2024 and 2025 — 85.0 rubles per dollar (revision by +6.4–9.1% compared to the June survey).
· Urals oil price: No significant changes. According to the analysts’ expectations, in 2023 Urals oil will cost around $57 per barrel on average, in 2024 the price will rise to $60 per barrel and remain on this level in 2025.
33 RUSSIA Country Report August 2023 www.intellinews.com