The level of expected inflation rose from 3.1% year-on-year to 3.4 % by the end of 2018. The Agency has linked it with a weak ruble and accelerated growth of commodity prices. While the Ministry is confident that “described the inflationary pressures are temporary” and the beginning of next year their effects are exhausted. In this regard, the MAYOR is the same as before, expect in 2019, the rate of inflation at 4.3 %.
The forecast for GDP growth has also become more pessimistic. The Ministry reduced the expected growth rate of the Russian economy from 1.9% to 1.8% by the end of this year and from 1.4% to 1.3% by the end of next year. That growth forecast will be revised, economic development Minister Maskim Oreshkin told journalists in August.
In anticipation of sanctions
The old forecast of economic development was divorced from reality, says principal analyst at Nordea Bank Denis Davydov. The new settings more closely reflect the current economic situation, however, the Agency still tries to be optimistic and does not include in its forecasts a negative scenario of development of events.
According to experts, given the current situation, the Ministry is as close to a fair valuation as the markets to the challenges ahead have already responded and negativity is largely taken into account. Again, however irrelevant it may make the adoption of the most rigid variant of sanctions against Russia.
Additional pressure on the ruble may also have a deteriorating situation in emerging markets. “If a situation which is now observed in Argentina and Turkey, will have a contagion effect and spread to other countries, such as Brazil, and the fall markets will acquire the character of panic, this will be a big challenge for the Russian currency”, – said Davydov. The MAYOR also assumes the position of Affairs at the moment, and therefore such risks in the underlying scenarios hardly taken into account.
Macroeconomic forecasts for the economy are not implemented in the vast majority of cases, I’m sure the Director for investments IK “Peter trust” Mikhail Altynov. “Especially bad is the situation with the implementation, when the forecast horizon is the fall in oil prices. In this case, the divergence is simply indecent” – said the expert.
In his opinion, the MAYOR definitely will have to soon revise the forecast if you enter a tangible sanctions or falling oil prices. “The background information the coming months seem to be generally very dangerous for any forecasts on the economy of Russia”, – concludes the expert.