Final growth estimate for Russian GDP in 2024 could top 4% - CBR advisor

CHELYABINSK. Nov 7 (Interfax) - The Central Bank of Russia's (CBR) forecast for Russian GDP growth in 2024 is 3.5%-4%, but the final estimate for economic growth this year, after all reviews, could even exceed 4%, the advisor to the CBR governor, Kirill Tremasov said.

"In 2023, if you recall, GDP growth amounted to 3.6%. Rosstat usually reviews the figures at the end of the year. I think that at the end of this year we'll get an estimate for last year of upwards of 4%. That's my personal opinion. And this year our growth rates are also tracking at 3.5%-4%. After all reviews, I wouldn't be surprised if it will also be upwards of 4%. In other words, two years of very high growth rates for the Russian economy," Tremasov said at the Russian Economic Forum in Chelyabinsk.

He said that "with the picture taking shape, which is leading to inflation accelerating, we're forced to raise the key rate, so as to stop the continued overheating of the economy and return the economy to a balanced growth trajectory."

"Such a [growth] trajectory, by our estimates, is 1.5%-2.5% per year. Next year we expect a slowdown," Tremasov said.

The economy has deviated from its equilibrium trajectory this year and "essentially hit the ceiling of production capabilities, and it's impossible to growth further at such rates [...] simply for the objective reason of the worker shortage, 100% capacity utilization" he said.

"Yes, we could grow this quickly when capacity was available and there were people, available labor resources. Now there are no longer these resources in order to reach the same growth rates, they are being used. Therefore growth will naturally slow. These are absolutely natural processes, not in any way related to the key rate or anything else," Tremasov said.

"We [at the CBR] forecast GDP growth of 0.5%-1.5% for next year, then 1%-2% [in 2026] and arrival at a trajectory of balanced growth in 2027 - 1.5%-2.5%. We see that the Russian economy can smoothly move along this trajectory," Tremasov said.