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Russian GDP Drop Eases as Nabiullina Says Inflation Risks `High'

  • Bank of Russia governor sees grounds for `cautious optimism'
  • January GDP shrank 2.5% from year earlier, ministry estimates

Russia’s economy contracted at a slower pace in January and central bank Governor Elvira Nabiullina warned that inflation risks remain “high,” complicating the picture for policy makers in the weeks before they review interest rates.

Gross domestic product shrank 2.5 percent from a year earlier after a 3.5 percent plunge in December, the Economy Ministry said in a report on its website on Monday. Inflation expectations, a key gauge of future price growth, fell in February even as the ruble weakened, giving grounds for “cautious optimism,” Nabiullina was quoted as saying by Interfax in Shanghai.