JRL NEWSWATCH: “Officials get somber on GDP growth” – BMB Russia/ Bear Market Brief

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“… Oreshkin cited … one-off factors such as an increase in oil production and a dangerous boom in consumer borrowing as unsustainable sources of 2018 growth. … tr[ying] to refocus the discussion on structural reforms …. [and] a massive investment drive via national projects in infrastructure, demography, health, education, and exports …. Nevertheless, to the extent that the high 2018 GDP figures were politically motivated, the need for officials to now backtrack on the positive messaging and reaffirm reality has made the endeavor a real flop. …

  • MinEkonomiki has kept its 2019 growth forecast unchanged at 1.3%.
  • The ministry believes GDP growth will not accelerate above 2% until 2021, after a 7.6% boost in investment in 2020.
  • In last week’s rate meeting, the CBR also ignored Russia’s 2018 growth spurt, holding the key policy rate at 7.75%.
  • Noting that in December, growth rates of industry, construction, real wages, and retail turnover slowed, the CBR reiterated its expectations that 2019 GDP growth will fall between 1.2-1.7%.”

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