22 Mar 2019 15:14

CBR raises 2019 oil forecast to $60/barrel, maintains 1.2%-1.7% GDP growth forecast

MOSCOW. March 22 (Interfax) - The Central Bank of Russia (CBR) has left unchanged its 2019 GDP growth forecast at 1.2%-1.7%, and forecasts for 2020 and 2021 at 1.8%-2.3% and 2%-3%, respectively, the regulator said in a medium term forecast, published after its board meeting at which it was decided to hold the key rate at 7.75% per annum.

The CBR raised its 2019 Urals crude price forecast to $60 from $55 a barrel, leaving the 2020-2021 forecast unchanged at $55.

"The economy is close to its potential. Current consumer demand movements and labour market conditions do not generate excessive inflationary pressure. In January-February, annual industrial production growth was the same as in 2018 Q4. Investment activity growth is still moderate. As predicted by the Bank of Russia's forecast, annual retail sales growth declined in January-February as a result of the VAT increase and a slowdown in wage growth," the CBR said in a press release.

"The Bank of Russia maintains its 2019 GDP growth forecast in the range of 1.2-1.7%. The VAT hike slightly constrains business activity. Newly attracted budgetary funds will be used to boost government spending, including spending on investments, as early as 2019. Subsequent years might see higher economic growth rates as national projects are implemented," it said.