Anticipated Inflation Rate in Conservative Scenario: 8.2% (According to Ministry of Economy)
Russia's Economic Outlook for 2025: An Uncertain Scenario
The Ministry of Economic Development has set the annual average dollar rate at a conservative 96.6 Rubles, projecting a base scenario estimate of 94.3 Rubles. The ministry has also approved a conservative forecast for Urals oil price at $56 per barrel (unchanged from the base scenario) and $48.8 in the more pessimistic scenario.
Trade balance is expected to reach $86.8 billion in the base scenario and $71.4 billion in the conservative scenario. While industrial growth in the conservative scenario for 2025 is projected at a modest 2%, the base scenario anticipates a more robust 2.6%. Wages are predicted to grow at 5.3% in the conservative scenario compared to 6.8% in the base scenario. The unemployment rate is to remain steady at 2.5% in both scenarios. Investment growth is expected at 0.8% in the conservative scenario and 1.7% in the base scenario.
Analyst consensus generally aligns with the Ministry's updated forecast, according to BCS Global Markets Chief Economist Ilya Fedorov. However, he notes a discrepancy in the GDP growth rates, deeming them "overly optimistic given tight monetary policy, cautious budget, and limited labor resources." BCS Global Markets expects GDP growth of no more than 1%, as per Fedorov.
Sofia Donets, T-Investments Chief Economist, finds the conservative scenario appears "slightly optimistic for a conservative scenario," especially considering the Q1 GDP growth of 1.7%, which falls below the Ministry's projections in both scenarios.
For a deeper look into Russia's three-year macroeconomic forecast update, check out our article.
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- According to BCS Global Markets Chief Economist Ilya Fedorov, the Ministry's updated forecast for Russia's GDP growth might be "overly optimistic given tight monetary policy, cautious budget, and limited labor resources," with a projected growth of no more than 1% in 2025.
- Despite the Ministry of Economic Development's projected 2% industrial growth in the base scenario for 2025, T-Investments Chief Economist Sofia Donets finds the conservative scenario's industrial growth projection to be "slightly optimistic for a conservative scenario," considering Q1 GDP growth of only 1.7%, which falls below the Ministry's projections in both scenarios.
- The Ministry of Economic Development has approved a conservative forecast for Urals oil price at $56 per barrel in the base scenario and $48.8 in the more pessimistic scenario for the year 2025.
- In the base scenario for 2025, the Ministry of Economic Development anticipates a more robust 2.6% industrial growth compared to the conservative scenario's modest 2% industrial growth.
