Russia’s Ministry of Finance is projecting steady GDP growth of more than 4% in 2021, while raising the outlook for inflation to more than 5%, Vedomosti newspaper reported on Wednesday, citing officials.
“The trajectory of recent months indicates even more optimistic recovery dynamics and a possible acceleration of economic growth rates above 4% per annum,” the newspaper states, quoting a letter by Russia’s Deputy Finance Minister Vladimir Kolychev to Deputy Prime Minister Dmitry Grigorenko.
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Russia’s gross domestic product (GDP) has already increased by 4.6% in the first half of 2021, reaching the pre-pandemic level corresponding to the fourth quarter of 2019. That figure represented growth of 8.5% in annual terms – the fastest growth Russia’s economy has seen since 2012. Average annual growth in 2014-2019 was less than 0.5% and declined 3.1% in 2020.
Earlier this month, Russia’s economy ministry set the GDP growth outlook for 2021 at 3.8% and inflation at 5%. The finance ministry, however, states that inflation may well exceed these expectations, siding with the Russian central bank, which recently projected the indicator to reach as much as 6.2% by the end of 2021.
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Consumer prices in the country have already seen a 4.6% increase from January to July this year. With this in mind, along with a number of other remaining pro-inflationary factors, such as surging global food prices and a steady post-pandemic recovery in demand, the finance ministry predicts inflation will surpass the 5% mark. Inflation in Russia in 2020 was 4.9%, according to Russia’s statistics agency Rosstat.
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