Sberbank's chief economist expects Russia's central bank to keep cutting its key rate this year, even as Ukrainian strikes disrupt oil, e-commerce, and grain infrastructure. The lender also raised its 2026 growth forecast, pointing to stronger consumer and state demand, while projecting a weaker rouble into year-end.
Russia's central bank will keep cutting its key rate this year, lowering it to 13.5% from 14% by the end of this year, Sberbank's chief economist Alexander Isakov told Reuters. The forecast holds even as Ukraine keeps striking Russian economic targets.
Growth forecast rises despite disruption
Sberbank, Russia's largest lender, also nudged up its 2026 economic growth forecast to 0.4% from 0.3%, citing a stronger-than-expected second quarter and robust consumer and state demand. According to Reuters: "On the demand side, the drivers of growth remain the budget and the consumer duo", Isakov said, adding that fiscal spending would boost the economy by an amount equivalent to 2% of GDP this year.
The central bank raised its key rate in 2024 to combat inflation and has since faced criticism for contributing to a sharp economic slowdown.
Ukrainian attacks squeeze the economy
In recent months, Ukraine has targeted Russian oil refineries, e-commerce infrastructure, and grain export facilities. The attacks caused petrol shortages, losses for tens of thousands of small businesses reliant on internet trade, and a halt to grain exports via the Black Sea to major customers.
Even so, a rise in inflation fuelled by petrol prices, and higher inflation expectations linked to the attacks, did not prevent the central bank from cutting rates by 25 basis points in July. Isakov said a rate cut in September is possible, followed by one pause before year-end, then cuts of 25 to 50 basis points per meeting with pauses in between.
Rouble seen weakening further
The central bank's next rate-setting meeting is on September 11, followed by meetings in October and December, and Isakov said a high degree of uncertainty still surrounds the outcomes.
He also said the rouble, which has weakened 15% to about 80 per dollar since May, is expected to weaken further to between 86 and 88 per dollar by year-end. His full-year inflation forecast remains unchanged at 6.5%.
Source: Investing.com
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