Uncertainty over Russian inflation forecast

RUSSIA / FSU POLITICS - In Brief 27 Sep 2019 by Alex Teddy
On September 25 the Russian draft budget was published online. The President held meetings concerning the draft budget. The Ministry of Economic Development forecasts that inflation will be 3.6% by the end of 2019 and 3% by the end of 2020. However, the Bank of Russia predicts inflation will be between 4% and 4.5% by the end of 2019. Some spending will now be indexed by one percentage point less than planned in 2019 and 2020. To achieve 3% inflation the government must adopt a tighter monetary policy. Stagnant growth would make this challenging. Putin is reportedly unhappy at the national projects falling behind schedule. He holds the Minister for Economic Development Oreshkin partly responsible. If these projects were on track then the economy would be in better health. RUR 700 billion was supposed to be spent on these projects but much of the spending has been delayed. The President regards economic travails as being partly owing to this delay. An opinion poll showed that the economic issue that worries the public most is rising prices.

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