Russian GDP growth will be around 2% in 2025 in best-case scenario - Klepach

CHELYABINSK. Nov 7 (Interfax) - Economic growth in Russia will be around 2% in 2025 according to the optimistic scenario, which is lower than the Economic Development Ministry's official forecast of 2.5%, VEB.RF chief economist Andrei Klepach said.

"We and the Economic Development Ministry had approximately similar estimates of GDP growth for next year [at 2.5% from the ministry and 2.6% from VEB], but I now think that in the best scenario we'll get around 2%," Klepach said at the Russian Economic Forum in Chelyabinsk on Thursday.

Due to the current key rate, growth in investment in fixed capital in 2025 will be around 1%, rather than 1.9% which VEB.RF previously forecast, he said. This will be "largely due to the budget and the completion and continuation of projects that it costs more to stop," he said.

Major investment projects are included in national projects, but by the time the Finance Ministry allocates them and contracting is completed, the investment will only reach the economy in Q3 or Q4 2025. Consequently, their main effect will be felt in 2026, he said. "Therefore, 2026 will be better than 2025; I dare to predict that," he said.

As reported, at the end of October the Central Bank of Russia confirmed its forecast for Russia's GDP growth at 3.5%-4% in 2024, 0.5%-1.5% in 2025, 1%-2% in 2026 and 1.5%-2.5% in 2027.

The Economic Development Ministry forecasts Russia's GDP growth at 3.9% in 2024, 2.5% in 2025, 2.6% in 2026 and 2.8% in 2027. The differences between the ministry and the Central Bank's forecasts are due to varying assessments of potential growth, Deputy Economic Development Minister Polina Kryuchkova said.

The CBR estimates the long-term potential GDP growth rate as being in the range of 1.5%-2.5%, while the Economic Development Ministry considers it to be higher.