Situation, including inflation, developing in line with CBR's macroeconomic forecast - Zabotkin

MOSCOW. Oct 15 (Interfax) - The situation in the Russian economy, including inflation, is unfolding in line with the Central Bank of Russia's macroeconomic forecast, CBR Deputy Governor Alexei Zabotkin said during a meeting of the joint working group in the State Duma.

"Currently, these data - ongoing high employment with a gradually slowing rise in prices and decreasing inflation - give us license to claim that the scenario of a smooth retreat from the overheating of last year will become reality and that the situation is developing in line with our macroeconomic forecast for this year," Zabotkin said.

He said that unemployment in Russia was at an all-time low of 2.2% and that the labor market was more rigid than ever, although the latest data show signs of this rigidity decreasing.

"Inflation has slowed down, but it still has not decreased all the way to 4% in seasonally adjusted terms. The September figures published last Friday accord with the judgement voiced by the board of directors both in July and in September, that persistent components of inflation are in the 4%-6% range in annual, seasonally adjusted terms," the CBR Deputy Governor said.

The CBR has said that monetary policy is currently tough enough for inflation to slow down. The speed at which the CBR lowers the key rate will be proportionate to progress in restoring inflation to the target of 4%, Zabotkin said.

"After inflation slows to 6%-7% at the end of 2025, the economy will go back to a persistently low level of inflation at our target of 4% next year," he said.

He also said that several rate cuts had brought about a noticeable increase in lending in the third quarter of 2025, especially to businesses.

Russia's GDP growth in 2025 could be closer to the lower threshold of the CBR's July forecast of 1%-2%.

"It [the CBR's July forecast] envisages that GDP will grow 1%-2% in 2025 - most likely, in the lower threshold of the range - and 0.5%-1.5% in 2026, accelerating to 1.5%-2.5% in 2027 and in subsequent years. It is precisely this growth trajectory which will allow demand to align with production capacity under our baseline scenario next year," Zabotkin said.