TheRussian Central Bank predicted growth of 1.5 to 1.8 percent this year, down from a forecast of 2 percent made last quarter.
Central Bank governor Elvira Nabiullina said last week that the bank had revised down its forecast because it was surprised by last year's poor growth rate of 1.3 percent.
In its report, the Central Bank said it expected annual growth in household consumption to fall to 3.1 to 3.3 percent in 2014 from 4.7 percent in 2013. Fixed-investment growth was forecast at 1.4 to 1.6 percent in 2014, up from 0.3 percent in 2013.
The Central Bank said the slight improvement in growth expected over the next two years was "in line with the revival of the global economy and thanks to a gradual improvement in the investment climate and the mood of economic agents in Russia." It still expects output to remain slightly below its potential.
The bank said the Sochi Winter Olympics should boost growth in the first half of 2014, which it estimated at 0.3 percentage points.
But the Central Bank warned that the price of oil, Russia's major export, could fall in the short term because of weakening business activity in China and increased deliveries from Iran and Libya.
The bank said the ruble's weakening at the end of 2013 and the beginning of 2014 could add 0.3 to 0.5 percentage points to the inflation rate, but it predicted that the effect would be offset by weak demand.
It maintained its forecast that the annual increase in consumer prices would fall to 5 percent this year, 4.5 percent in 2015 and 4 percent in 2016. Weak economic activity and reduced inflationary expectations would lower the inflation rate, it said.
But the bank warned that a weaker ruble implied long-term risks to the economy.
Read more: Central Bank Downgrades Medium-Term Economic Growth Forecast | Business | The Moscow Times
Central Bank governor Elvira Nabiullina said last week that the bank had revised down its forecast because it was surprised by last year's poor growth rate of 1.3 percent.
In its report, the Central Bank said it expected annual growth in household consumption to fall to 3.1 to 3.3 percent in 2014 from 4.7 percent in 2013. Fixed-investment growth was forecast at 1.4 to 1.6 percent in 2014, up from 0.3 percent in 2013.
The Central Bank said the slight improvement in growth expected over the next two years was "in line with the revival of the global economy and thanks to a gradual improvement in the investment climate and the mood of economic agents in Russia." It still expects output to remain slightly below its potential.
The bank said the Sochi Winter Olympics should boost growth in the first half of 2014, which it estimated at 0.3 percentage points.
But the Central Bank warned that the price of oil, Russia's major export, could fall in the short term because of weakening business activity in China and increased deliveries from Iran and Libya.
The bank said the ruble's weakening at the end of 2013 and the beginning of 2014 could add 0.3 to 0.5 percentage points to the inflation rate, but it predicted that the effect would be offset by weak demand.
It maintained its forecast that the annual increase in consumer prices would fall to 5 percent this year, 4.5 percent in 2015 and 4 percent in 2016. Weak economic activity and reduced inflationary expectations would lower the inflation rate, it said.
But the bank warned that a weaker ruble implied long-term risks to the economy.
Read more: Central Bank Downgrades Medium-Term Economic Growth Forecast | Business | The Moscow Times
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