Page 8 - Russia OUTLOOK 2024

one-off factors.
Key points highlighted by Nabiullina include:
Inflation: persistence of high inflationary pressure, with an expected slowdown next year and a goal to bring inflation down to 4% by the end of 2024.
Growth: Despite higher-than-expected GDP growth of 5.5% in the third quarter, the CBR anticipates that sustained growth at this level is unsustainable, projecting GDP growth between 0.5% and 1.5% for next year.
Unemployment: November witnessed unemployment dipping to a record low of 2.9%, prompting companies to focus on maximising staff productivity, often extending working hours or adding extra shifts.
Subsidised lending: State-subsidised lending, particularly in mortgages, continues to contribute to inflation, with 80% of new mortgages last month being subsidised.
Commodities: The global economy's cooling has resulted in reduced demand for raw materials, affecting Russian oil and gas exports.
Notably absent from Nabiullina's press conference comments was any discussion of the primary cause of Russia's overheating economy: the war in Ukraine and the subsequent substantial increase in military spending, set to rise by 68% in 2024.
There is a growing split between the problems that Nabiullina worries about and the Kremlin, which used the same numbers, but Putin cited them as progress, not a problem, during his annual Q&A session in December.
Economic growth of 5.5% in the third quarter of 2023 means Russia has reversed the previous year’s contraction. “It’s a good indication,” Putin said. By the end of the year, Putin said he expected inflation to be as high as 8%. “Unfortunately we have rising inflation,” he admitted. But he assured viewers that the Central Bank and the government were taking the necessary measures, and that inflation is anticipated to return to target levels.
Industrial output is growing (3.6%), “I’m especially pleased” with 7.5% growth in manufacturing, Putin said (this figure reflects Russia’s booming defence industry). Salaries are up 8%, disposable incomes are up 5% and unemployment is at an all-time low of 2.9%.
“This is a very good integrated indication of the health of the economy,” Putin said.
8 Russia OUTLOOK 2024 www.intellinews.com