Russia's GDP to grow 3.9%-4% in 2024, soft landing expected in 2025 with 2%-2.5% growth - Putin

MOSCOW. Dec 19 (Interfax) - Russia's GDP growth is expected to reach 3.9%-4% in 2024, and the government and the Central Bank are planning a soft landing with 2%-2.5% growth in 2025, Russian President Vladimir Putin said in his Q&A session combined with the end-of-year press conference.

"It [GDP growth] will stand at 3.9%, or maybe even 4% this year," Putin said.

The economic situation "is stable and reliable," he said.

"There are certain problems with inflation, the economy is heated. Our government and the Central Bank have set the task of slowing down the pace [the economic growth above the potential rates]," Putin said.

"According to various estimates, I think we will have 2%-2.5% [GDP growth] next year, a soft landing needed to maintain our macroeconomic indicators," he said, speaking of the 2025 GDP growth forecasts.

As reported, the Federal State Statistics Service estimated the GDP growth at 4.2% in 9M 2024, including 5.4% year-on-year in Q1 2024, 4.1% in Q2 2024, and 3.1% in Q3 2024.

The Central Bank forecasts a GDP growth of 3.5%-4% this year, while the Economic Development Ministry's forecast is 3.9%.

Forecasts of the Central Bank and the Economic Development Ministry for 2025 differ quite significantly.

The Central Bank raised the key rate from 19% to 21% in October, and confirmed its outlook for Russia's GDP growth in 2025 at only 0.5%-1.5%. Most analysts, polled by Interfax in December, are confident that, against the backdrop of high inflation, the Central Bank will keep raising the key rate to 23% at the Board of Directors meeting on December 20, and some experts do not even rule out its immediate increase to 25%.

The official forecast given by the Economic Development Ministry in September, which was included in the 2025 budget (the ministry based its forecast on expectations of a softer monetary policy at the end of 2024 and 2025), says the GDP will grow 2.5% in 2025. The current stringent monetary policy makes this forecast look quite optimistic.

A consensus forecast of analysts polled by Interfax in early December is a 1.5% GDP growth in Russia in 2025.