Central Bank raises Russian 2025 GDP growth forecast to 1.0-2.0% from 0.5-1.5%, lowers 2026 forecast to 0.5-1.5% from 1.0-2.0%

MOSCOW. Feb 14 (Interfax) - The Central Bank of Russia has raised its forecast for Russian GDP growth in 2025 to 1.0-2.0% from the 0.5-1.5% it was predicting in October, the regulator said in its medium-term forecast, published following the decision to hold the key rate at 21%.

The forecast for year-on-year GDP growth in Q4 2025 was lowered to 0.0-1.0% in from 0.5-1.5%.

The Central Bank lowered its forecast for GDP growth in 2026 to 0.5-1.5% from 1.0-2.0%.

It left its growth forecast for 2027 unchanged at 1.5-2.5%.

The upward deviation of the Russian economy from a balanced growth path is still significant, the Central Bank reiterated.

The Central Bank of Russia has raised the inflation forecast to 7%-8% in 2025 from 4.5%-5% previously, the CBR said.

The CBR still expects that annual inflation to return to 4% in 2026 and remain on target thereafter, given the current monetary policy stance.

The CBR said that seasonally adjusted current price growth averaged 12.1% on an annualized basis in the fourth quarter of 2024 after 11.3% in the previous quarter. The same measure of core inflation also increased to an average of 12.1% after 7.6% in the previous quarter.

Persistent inflationary pressure has increased, reflecting strong domestic demand in the second half of 2024, the CBR said. The weakening of the ruble in the fall also contributes to price dynamics. Weekly data in January and early February indicate that the current pace of price growth has slowed slightly compared to December, though remains high. Annual inflation was 10%, as estimated on February 10.

The population's inflation expectations remain close to the high levels of late 2024, the CBR said. The expectations of professional analysts have grown for 2025 and remain above 4% in 2026. Meantime, the price expectations of enterprises have declined for the first time since the first quarter of 2024, though remain at an elevated level.

The CBR's baseline scenario envisages inflationary pressures to begin easing gradually in the coming months on the back of cooling lending and high savings activity.