Russian Economy Ministry Raises GDP, Inflation Forecasts

Russia’s economy will expand 3.5 percent this year, exceeding a prior forecast of 3.4 percent, while consumer prices will advance 7 percent, Deputy Economy Minister Andrei Klepach said.

The ministry raised the inflation forecast for this year from 5 percent to 6 percent, which is still the central bank’s estimate. Consumer prices will rise 5 percent to 6 percent in 2013, a range half a point higher than the ministry’s earlier forecast and Bank Rossii’s goal.

Economy Minister Andrei Belousov said last month that the forecast for growth this year may be upgraded to as high as 4 percent after retail sales and investment surged in the first half. Growth will slow to 2.7 percent from a year earlier in the third quarter before rising to 2.9 percent in the final three months, Klepach said today.

Net private capital outflows may reach $50 billion to $60 billion this year, above the prior forecast of $25 billion, Klepach said. Net capital flows may be balanced next year, compared with an earlier estimate of $15 billion in inflows. The ministry also downgraded its forecast for the average ruble rate this year to 31.3 per dollar and for next year to 32.4 per dollar, Klepach said.

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