Excerpt from the statement by the Board of Directors:
The pace of economic growth remains low. Production activity and investment demand remain subdued. Despite increase in particular producer confidence indicators it is too early to draw a conclusion about a reversal in their dynamics. Consumer demand supported by the real wage and retail lending growth remains the major driver for the economic growth. According to the Bank of Russia estimates, gross output stays slightly below its potential level. At the same time the unemployment rate stays at the relatively low level. 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, while substantial widening of the negative output gap is not forecasted.
In October, annual CPI inflation increased to 6.3% which exceeded the upper bound of the target range for the current year. The absence of significant demand-side inflationary pressure in the context of gross output staying slightly below its potential level is one of the factors containing rise in non-food prices and core inflation in recent months. If current macroeconomic tendencies continue, inflation is projected to decline further in 2014.