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2025-10-31 22:00:53
[Russian Inflation Expectations Revised Upwards, Central Bank's Room for Interest Rate Cuts Limited] ⑴ A Reuters poll shows analysts have revised their 2025 inflation forecast for Russia upwards to 6.9% from 6.5%, consistent with the central bank's forecast range of 6.5%-7%. ⑵ The 2026 inflation forecast is set at 5.4%, still above the official target, reflecting persistent price pressures. ⑶ Economic growth expectations remain unchanged, with 2025 GDP growth estimated at 1.0%, indicating limited economic recovery. ⑷ Ruble exchange rate expectations have improved, with the 12-month USD/RUB forecast revised down from 97.7 to 94.2, indicating easing pressure on currency depreciation. ⑸ The central bank's key interest rate is expected to fall from the current 16.5% to 16.0% by the end of 2025, a reduction of only 50 basis points. ⑹ The upward revision of inflation expectations is mainly due to the government's tax increase plan; changes in fiscal policy exacerbate the risk of rising prices. ⑺ The central bank faces challenges in balancing inflation control and economic growth, limiting its room for monetary policy easing. (8) Real interest rates remain high, and despite rising inflation, the central bank still needs to maintain a tight stance to anchor price expectations.
