Russia’s Central Bank Forecasts a Bleak 2016 and 2017

According to the official, the Central Bank expects zero dynamics of the GDP in 2017.

“We expect the GDP will decline 1.3-1.5% in 2016, smaller than in 2015, and growth rates will be close to zero in 2017, somewhat plus-minus 0.5%. The annual growth rate of the GDP will be positive in 2018,” Nabiullina said.

As for the current strengthening of the ruble against foreign currencies, the Central Bank does not consider the current strengthening of ruble to be a stable trend.

“So far, we do not believe it to be a trend, as the factors that influence the exchange rate today may be quite volatile in the near future, so we do not see a stable trend here. Let’s see, and if a stable trend si formed, we will act accordingly,” she said.

Russia’s capital outflow meanwhil this year is expected at about $40 bln.

“We will not see the high capital outflow. It will be about $40 bln in 2016 under the base case scenario and will just slightly grow then. Hence we do not expect any material changes in international reserves of the Central Bank,” Nabiullina said.

The capital outflow in Russia declined fivefold to $5.9 bln in January-February 2016, the Bank of Russia said earlier. The net capital withdrawal by the private sector continues to be at the lowest level, the regulator said.

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