Morgan Stanley has lowered the GDP growth forecast for Russia – Economy News

Print Morgan Stanley has revised the growth forecast of Russia’s GDP in 2017 from 1.4% to 1.2% due to expectations of weak consumer demand after the budget optimization. The key rate will be reduced to 8.5%, inflation will not exceed 5,1%.According to experts, Russia’s economic recovery will become noticeable in the fourth quarter of 2016 ., however, the growth rate will be lower than previously thought.

the Russian oil Price will not exceed $ 50 per barrel, oobschaetsya in the review of the investment.

“the Pace of growth of the Russian economy will continue to depend on the dynamics of oil prices, and domestic and foreign policy. Relatively oil prices, our expectations remain unchanged. We expect that the average cost of Urals oil in 2017 will be $ 50 per barrel and will rise to $ 53 per barrel in 2018. Meanwhile, the planned austerity will weigh on consumer demand, which, according to our new estimates, will increase in 2017 by 1.1% versus 2.1% expected. In 2018, the recovery of consumer demand in the run-up to the presidential election will be more visible, and it will grow for the year by 2.3%,” – noted in the review.

Analysts hope that the government will begin to implement structural reforms, as their absence severely limits the growth potential of the Russian economy. According to experts, if Russia will not happen changes, potential growth will be limited to 1.1% in years 2017-2019 and 1.8% in the long term.

As analysts expect that in 2017 the key interest rate will be reduced by 150 basis points to 8.5%, while inflation will not exceed 5,1%.

“According to our estimates, on average by 2017, inflation will be in Russia 5.1% and will slow to 4.7% by the end of the year. The first reduction of the key rate by 50 basis points we expected in the first quarter of 2017, it will then be lowered by 25 basis points in the second quarter,” predicts investment Bank.

“To the end of the year the key rate in Russia will be 8.5% (consensus forecast of 8.2%). By the end of 2018 inflation will slow slightly to 4.5%, which will allow the CBR to cut key rate twice: by 25 basis points to 8% by the end of the year”, – stated in the review, which cites “Interfax”.