Russia's Economy Ministry Holds 2025 GDP Forecast at 2.5% Despite Signs of Cooling
Russia's Ministry of Economic Development sees signs that the economy has begun to cool and will closely analyse fourth-quarter data, but for now keeps its 2025 GDP growth forecast at 2.5%, Economy Minister Maksim Reshetnikov said on 30 October 2024 at a business forum in Tanzania. The ministry raised its 2024 forecast to 3.9% in September, while the Bank of Russia, having lifted the key rate from 19% to 21%, sees 2025 growth of just 0.5-1.5%.
Moscow. Russia's Ministry of Economic Development (Минэкономразвития) sees signs that the national economy has begun to "cool" and will carefully assess the fourth-quarter dynamics, but for now keeps its forecast for GDP growth in 2025 at 2.5%, head of the ministry Maksim Reshetnikov (Максим Решетников) told journalists on 30 October 2024 on the sidelines of a business forum in Tanzania, Interfax reported.
"Right now we are moving within the parameters that have been announced (2.5% growth in 2025 — IF)," the minister said when asked how the central bank's key-rate hike and its further trajectory would affect the ministry's economic growth forecast for 2025.
Watching the fourth quarter
"Right now we see signs of the beginning of an economic 'cooling'. Of course, we will watch very closely and analyse the situation on the basis of the figures that appear (on economic dynamics in the fourth quarter — IF)," Reshetnikov said. He also set out the ministry's consistent position on monetary policy: "The main message we always give is that the timeliness of decisions (on the key rate — IF) matters, not simply the tightness or softness of (monetary) policy."
Forecasts revised upward in September
In September, the Ministry of Economic Development raised its forecast for the country's GDP growth in 2024 to 3.9% from 2.8%, and its 2025 forecast to 2.5% from 2.3%.
The Bank of Russia the previous week raised the key rate from 19% to 21% and confirmed its own forecast for GDP growth in 2024 in the range of 3.5-4%, while for 2025 it projects only 0.5-1.5% — markedly more cautious than the ministry's 2.5%.
- Economy Ministry: GDP +3.9% in 2024, +2.5% in 2025
- Bank of Russia: GDP +3.5-4% in 2024, +0.5-1.5% in 2025
- Key rate raised from 19% to 21%
- The ministry will judge the "cooling" trend by fourth-quarter data
The gap between the two official forecasts frames the policy debate: how quickly the key rate raised to 21% feeds through into slower growth, and whether the ministry will follow the central bank's more conservative 2025 outlook once fourth-quarter statistics arrive. Further context on Russia is available in the country profile.
Source: Interfax
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