24 Dec 2019 12:02

Russian GDP growth to slow in Q4 2019, pick up in Q1 2020 on low base effect - CBR

MOSCOW. Dec 24 (Interfax) - The Central Bank of Russia (CBR) is expecting Russian GDP growth in Q4 2019 to slow after speeding up to 1.7% in Q3, the regulator said in a monetary policy report.

At the same time, growth rates will again pick up in Q1 2020 against the backdrop of a low base effect, the report said.

"In Q4, we are expecting somewhat of a slowdown in annual GDP growth rates from the high rates of Q3. Going forward in Q1 2020, the GDP growth rate will speed up, which will be driven by growth in gross savings and exports, as well as the low base of H1 2019," the regulator's report said.

According to Rosstat estimates, GDP in Q3 2019 was up 1.7% year-on-year after growth of 0.9% year-on-year in Q2 2019 and 0.5% in Q1 2019. In January-September 2019, GDP growth totaled 1.1%.

"An increased GDP growth rate in Q3 is prompted by higher agricultural output, increased retail trade turnover and acceleration in manufacturing," the CBR said in the report.

"The GDP growth rate for 2019 could prove to be closer to the upper threshold of the 0.8 - 1.3% range. This is first and foremost due to the higher than expected annual GDP growth rate in Q3 2019, which came to 1.7%. The sustainability of the current higher economic growth rates has yet to be assessed," the regulator said regarding its earlier 2019 GDP growth forecasts.

"The Central Bank's view regarding the growth of the Russian economy in 2020 - 2022 is unchanged. The GDP growth rate will gradually increase to 2%-3% in 2022. This is possible as the government carries out a series of measures on overcoming structural limitations in the Russian economy, including implementation of national projects. At the same time, slowing growth rates for the global economy which are expected on the forecast horizon will continue to have a constraining effect on Russian economic growth," the monetary policy report said.