Inflation in Russia expected at 6% in 2025 - deputy PM

MOSCOW. Dec 17 (Interfax) - Inflation in Russia is expected at 6% in 2025, which is lower than the official forecast (6.8%), Deputy Prime Minister Alexander Novak said at a meeting with the bureau of the board of the Russian Union of Industrialists and Entrepreneurs.

"A significant slowdown in inflation is being recorded: according to forecasts, by the end of the year it will be 6%, which is lower than the forecast," Novak was quoted as saying by the government's press service.

"Despite difficult external conditions and internal challenges, the country's economy is showing positive dynamics. Over the last three years, GDP growth will approach 10%," Novak said.

"The cumulative growth of real investments over the last four years has reached 36%. The main drivers of the economy are the manufacturing industry, mechanical engineering, agriculture and construction. We see positive dynamics in the oil and gas sector and freight turnover, primarily in exports," he said.

As reported, in October the Central Bank of Russia raised its inflation forecast for 2025 from 6%-7% to 6.5%-7% and from 4% to 4%-5% for 2026, thereby shifting the achievement of the inflation target to 2027.

In September, the Economic Development Ministry lowered its inflation forecast for Russia in 2025 to 6.8% from 7.6% in April, and kept its forecast for 2026 unchanged at 4.0%.

The consensus forecast of economists polled by Interfax in early December for inflation in 2025 is 6.3% (down from 6.9% in the poll a month ago), and 5.0% (5.1%) for inflation in 2026.

President Vladimir Putin said last week that inflation would be lower than the forecasts of both the government and the Central Bank and will be "around or below 6%."

Analysts are unanimously confident in a reduction of the Central Bank's key rate on Friday, differing in opinion only on the extent of monetary policy easing. With a slight advantage, the majority of experts forecast a rate cut of 50 basis points (bps) to 16%. Another group of economists expects a cut of 100 bps to 15.5%.