The Central Bank of Russia cut the key interest rate by 300bps to 14% on 29th April 2022. The CBR stated that weekly data indicate that general price growth rates have slowed down amidst cooling consumer activity and a recovery of the ruble, which allows the cut in the key rate. However, the external environment remains challenging for Russia and significantly constrains economic activity. Decisions on monetary policy will depend on incoming information, future developments and further changes in the balance of risks.
Russia’s official GDP is now projected to contract by 8-10% in 2022, dropping to the lowest point in 4Q22. In 2023, Russia’s economy is expected to range from zero to -3%, due to low base effect of 2022.