The Bank of Russia increased the forecast of GDP growth to 1.3% to 1.8% in 2017


MOSCOW, June 16. /TASS/. The Bank of Russia increased the forecast of GDP growth in 2017 to 1.3% to 1.8% 1-1,5%. This is stated in the press release of the Central Bank of the Russian Federation following the meeting of the Board of Directors of the regulator.

“The possible implementation of tax maneuver can lead to a temporary acceleration of inflation”, – stated in the message of the Central Bank.

Earlier, the Finance Ministry proposed to consider the tax maneuver, which is expected to reduce insurance premiums up to 22% and increase in value added tax (VAT) to 22% while keeping existing VAT exemptions.

In addition, notes of the Central Bank of the Russian Federation, increased medium-term risks associated with the future dynamics of oil prices, which, after the extension of the agreement on the limitation of production of exporting countries began to take shape at the level lower than expected. The second factor is the shortage of human resources: “enhancing the structural deficit of labor resources may lead to significant delays in the rate of productivity growth from wage growth”, according to the Central Bank. In addition, a source of inflationary pressure may be the change of behaviour of households, which exhibit less tendency to save. It is also sensitivity of inflation expectations to price changes for individual groups of goods and services and exchange rate dynamics.

Inflation and oil prices

However, short-term inflationary risks associated with the dynamics of the price of oil declined in connection with the extension agreement to limit production, is spoken in the message of the Central Bank.

However, this time of year manifest the short-term risks associated with the expected harvest, its impact on prices of food commodities and inflation expectations, said the regulator.

“Given these factors, it will require the continued moderately tight monetary conditions over a long time for anchoring of inflation close to the target level”, – concluded CBA.

However, inflationary risks associated with the change in the price of oil dropped after the extension of the agreement on the limitation of production of exporting countries, according to the Bank of Russia.

“Short-term inflation risks associated with the dynamics of oil prices, declined in connection with the extension of the agreement on the limitation of production of oil exporting countries”, – stated in the message of the Central Bank.

However, traditionally this time of year manifest the short-term risks associated with the expected harvest, its impact on prices of food items and inflation expectations, said the regulator.

The Board of Directors of the Bank of Russia took a decision to reduce the key rate by 0.25 percentage points to 9%. CBR notes the persistence of inflation near the target level, the continued reduction of inflation expectations and the recovery in economic activity. According to the regulator, the short-term inflation risks have declined, at the same time, in the medium term they remain. To maintain inflation close to the target values of 4%, the Bank of Russia promises to continue carrying out moderately rigid monetary policy.

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