SberCIB Investment Research analysts described what inflation, GDP growth, key rate and budget deficit will be like in 2025.

"This article covers macroeconomic indicators of Russia under different economic development scenarios," the institution noted.

Base case: soft landing

In the base case, SberCIB Investment Research analysts expect economic growth to slow down in 2025. In this scenario, the key macrostatistics indicators at the end of the year are as follows:

-annual GDP growth - 2.5%,

-budget deficit - 0.5% of GDP,

-annual inflation - at least 5%,

-average key rate - 19.1%,

-key rate at the end of 2025 is 17%.

In this scenario, the growth rate of real wages is gradually decreasing. This will lead to a decrease in inflation to the target of 4% annually in the second half of 2025.

In the long term, the economy will continue to grow at about 2.5 percent per year, with inflation remaining at 4 percent. The cumulative GDP growth forecast for 2025-2027 is 7.7 percent. This is a higher economic growth rate than the Central Bank’s baseline scenario. Accordingly, the Central Bank of Russia expects GDP growth of 0.5-1.5 percent in 2025, 1-2 percent in 2026, and 1.5-2.5 percent in 2027.

The possibility of a “soft landing” scenario: Analysts at SberCIB Investment Research believe that this scenario is already starting to play out. At the same time, inflation is still significantly above the target of 4 percent annually, forcing the Central Bank of Russia to pursue a long-term tight monetary policy. As a result, economic growth is slowing down, and the demand for workers is growing at about the same rate as the labor force (by 0.5 percent per year).

Risky scenario: “Overheating” of the economy

In the risk scenario, the economy will continue to “overheat” in 2025. Indicators may be:

-annual GDP growth - 3%,

-budget deficit - 1.5% of GDP,

-annual inflation - at least 9%,

-average key rate - 21.3%,

-key rate at the end of 2025 - 19%.

In case of further overheating of the economy, it will be possible to achieve the annual inflation target of 4% only in 2027. This will require a longer period of tight monetary policy. Therefore, GDP growth in 2026 can be 1% at best, and close to 2.5% in 2027.

The probability of a risk scenario is quite high, only slightly less than in the baseline scenario. Analysts are confident in the 2024 precedent: Initially, expenditures of 36.7 trillion rubles were included in the budget, but later increased to 39.4 trillion rubles.

Expenditures of 41.5 trillion rubles are planned for 2025. If budget expenditures again exceed the declared values, the state's demand for labor will increase. Given that unemployment reached a minimum level (2.4%) by the end of 2024, the “overheating” of the economy may be more noticeable than before. For comparison: unemployment in 2023 was 3.6%, at the beginning of 2024 it was 2.9%.

Optimistic scenario: Rapid disinflation

In an optimistic scenario, inflation is expected to reach the annual target of 4 percent in the first half of 2025. This will lead to a faster decline in the key interest rate and an acceleration of economic growth by 2026.

for more details

https://sbercib.ru/publication/chto-budet-s-ekonomikoi-rossii-v-2025-godu

FUAD SAFAROV