Russia's Econ Ministry raises GDP 2023 growth forecast to 2.8% from 1.2%, sees 2.3% growth in 2024-25

MOSCOW. Sept 13 (Interfax) - Russia's Economic Development Ministry has raised its forecast for the country's economic growth to 2.8% this year from the 1.2% projected in its April forecast, a spokesman for the ministry told reporters.

The ministry's revised macroeconomic forecast was reviewed and generally approved by the government's budget commission on Tuesday.

The ministry now expects GDP to expand by 2.3% in 2024, 2.3% in 2025 and 2.2% in 2026, while in April it projected growth of 2.0%, 2.6% and 2.8%, respectively.

"The main macro parameters have improved significantly. Foremost this concerns GDP growth. We estimate growth at 2.8% for this year, then an average of 2.3% for the forecast horizon. The figure of 2.3% for 2024, in principle, factors in the effects of monetary policy tightening," the spokesman said.

These figures are from the baseline scenario for the forecast, which is used to draft the budget, he said.

The ministry, as usual, has also prepared a conservative scenario that factors in the risks of a global economic slowdown, which could affect prices on commodity markets, as well as a number of internal risks. Besides the labor shortage in the country, the internal risks include tightening of monetary policy.

The spokesman said that "with excessive tightening it is possible to undermine incentives for long-term investments," so a balance is important here.