27 Dec 2022 10:22

CBR might narrow range of forecast for 2023 GDP

MOSCOW. Dec 27 (Interfax) - The Central Bank of Russia (CBR) might narrow the range of its forecast for the contraction of Russian GDP in 2023 from the 1-4% projected in October when it updates its medium-term macroeconomic forecast in February, the head of the CBR's monetary policy department, Kirill Tremasov said.

"In October our official forecast for the contraction of the economy for next year was indeed in the range of 1% to 4%. This is a wide range, not typical for our forecasts. Such a wide range was due to the high uncertainty, specifically in large part to the imposition of the latest package of EU sanctions. At that time the reaction was not yet fully clear, how the sector would react, what volumes of production, refining, exports we would lose or if we would lose at all," Tremasov said in an interview on the Bitkogan Youtube channel.

"I think that in February, when we publish the updated forecast, the range will be narrower, but in any case at this point we don't see the possibility of positive economic growth rates next year," Tremasov said.

The Russian economy will probably shrink next year, through the CBR's baseline scenario projects a turnaround of the downward trend in the middle or third quarter of 2023, he said.

"For now the sequential dynamic of GDP will go steadily downward, [but] sometime in the second half of the year we expect to see a turnaround," Tremasov said.

The CBR's October forecast sees GDP shrinking by 3-3.5% in 2022. However, Central Bank chief Elvira Nabiullina said recently that the contraction might turn out to be close to 3% or even less than 3% this year, depending on the dynamic in November and December.

The CBR's baseline forecast projects that GDP will grow by 1.5-2.5% in 2024-2025.