Russia's Central Bank Forecasts Inflation to Fall to 7-8% by 2025

The Central Bank of Russia has announced that inflationary pressures are expected to continue to ease over the coming months. This projection is based on the cooling of lending activities and the high level of savings activity within the economy. The bank's assessment indicates that these factors will contribute to a sustained reduction in inflation.

The bank's forecast is aligned with its baseline scenario, which anticipates a gradual decline in inflationary pressures. This outlook is supported by the current trends in lending and savings, which are expected to play a crucial role in moderating inflation. The bank's commitment to a tight monetary policy is aimed at ensuring that inflation and inflation expectations decrease at a steady pace, ultimately achieving the target inflation rate of 4.0% by 2026.

As of April 21, the annual inflation rate in Russia stood at 10.3%. The Central Bank of Russia estimates that by the end of 2025, this figure will decrease to between 7% and 8%. This projection is part of the bank's broader strategy to stabilize the economy and manage inflationary pressures effectively. The bank's approach involves maintaining a cautious stance on monetary policy, ensuring that any adjustments are made with a clear understanding of the economic landscape and the potential impacts on inflation.

The bank has acknowledged that core inflation is likely to remain elevated for the next few months, with pressures for policy easing continuing to accumulate. This situation underscores the need for a measured approach to monetary policy, ensuring that any changes are made with a comprehensive understanding of the economic environment. The bank's commitment to a tight monetary policy reflects its determination to stabilize the economy and achieve its inflation targets.

Vladimir Putin has prepared the Russian public for an economic slowdown in 2025, with growth rates expected to decline to 1.9% in the first few months of the year. The inflation rate remains above 10%, posing significant challenges to the economy. The bank's future monetary policy adjustments will be based on the speed and sustainability of the decline in inflation and inflation expectations, ensuring that the target is met by 2026.