Excerpt from the statement by the Board of Directors:
The pace of economic growth remained low. Production activity and investment demand remained subdued. Producer confidence indicators continued to deteriorate. At the same time the unemployment rate stayed at a relatively low level. Consumer demand supported by the real wage and retail lending growth remained the major driver for the economic growth. Nevertheless, given subdued investment activity and sluggish recovery of external demand, the Bank of Russia expects economic growth rate to remain low in the medium term. According to the Bank of Russia estimates, gross output stays slightly below its potential level, while substantial widening of the negative output gap is not expected.
The absence of significant demand-side inflationary pressure in the conditions of gross output staying slightly below its potential level is one of the factors of the decline in core inflation in recent months. According to the Bank of Russia estimates, given the improvement of food market conditions due to favourable assessments of this year harvest, inflation will continue to slow down, staying within the target range until the end of the year.
The Bank of Russia will continue to monitor inflation risks and the downside risks to economic growth. In making monetary policy decisions the Bank of Russia will be guided by the inflation goals and economic growth prospects.