9 Jun 2023 14:49

Economic activity in Russia growing more quickly than expected - CBR

MOSCOW. June 9 (Interfax) - The growth in economic activity in Russia is exceeding April forecast expectations thanks to the rapid recovery in domestic demand, the Russian Central Bank said in an announcement published after the board of directors' session where it decided to maintain the key rate at 7.5%.

"Economic activity is growing faster than expected in the Bank of Russia's April forecast. This largely reflects the active recovery of domestic demand. Despite the continued difficulties from the external environment, this supports companies' positive business sentiment," the release says.

At the same time, the Central Bank once again notes that "at the current stage, the possibilities for expanding production in the Russian economy are increasingly limited by the state of the labor market."

"Unemployment has again revisited its historical low. Against the background of partial mobilization and the continued growth in the demand of enterprises for labor, labor shortages are increasing in many industries. Under these conditions, labor productivity growth may lag behind the growth of real wages," the report says.