Russia’s Economic Growth Expected to Reach 1.8-2% in 2017

Russia’s economic growth in 2017 is expected to stand at 1.8 to two percent, Russian Finance Minister Anton Siluanov said on Sunday.

“This year, we expect an economic growth of 1.8%-2%,” he said in an interview with the Rossiya-24 television channel.

In mid-December, Russia’s Central Bank forecasted the country’s economic growth in 2017 at 1.7-2.2%. The Bank’s governor, Elvira Nabiullina, said back that that the forecast leaned “to the lower threshold.” In 2018, Russia’s economic growth, as predicted by the Central Bank, will be in a range from 1.5 to 2%

IMF Confirms Recovery of Russia’s Economy in 2017

The International Monetary Fund (IMF) confirmed its April outlook on gradual recovery of the Russian economy this year. Such statement is made by the IMF in its World Economic Outlook Update for July 2017.

“The Russian economy is projected to recover gradually in 2017 and 2018, in line with the April forecast,” the IMF said.

“Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies, such as Brazil, India, and Russia,” the IMF added.

Fund experts earlier projected real growth of GDP in Russia at the level of 1.4% in 2017.

Luxury Goods Sales Growing in Russia

Domestic demand for luxury in Russia is recovering. 62% of wealthy citizens said they increased the cost of luxury goods in the last year. The same trend can be seen in China and the UAE.

According to a Deloitte survey, covering 11 countries, 62% of buyers in Russia, China and the United Arab Emirates, countries that Deloitte refers to the developing markets of expensive goods, said about the growth of their spending on luxury goods in the last 12 months. In developed markets (in the European Union, the United States and Japan), the share of increased spending on luxury is much less – 49%.

The study involved 1,300 respondents who consider themselves wealthier than their country’s citizens on average and who have made at least one purchase of luxury goods in categories such as clothes and shoes, bags and accessories, cosmetics and perfumes, jewelry and watches for the past six months.

“Consumers in emerging markets continue to stimulate the growth of the luxury market,” Deloitte analysts conclude.

The Russian luxury goods market, which resumed its growth in 2016, continues to grow, also because of increase in the tourist flow, including from China. In addition, the Russian market of premium products was positively affected by the fact that retail companies held back or even cut prices. In 2016 the ruble strengthened, and the companies reduced the prices for luxury goods by more than 11% in Russia.

If in 2015 the Russian luxury goods market showed a decline for the first time in five years (by 9%, to 227.2 billion rubles), then in 2016 it resumed growth – it amounted to 1%, to 229.6 billion rubles.

The Ministry of Finance Aims Annual Economy Growth of 6-7%

According to Alexey Kudrin, Vice prime-minister and Minister of Finance, Russian GDP should gain 6-7% annually. Last year GDP saw the 4% growth and reached RUB 44.49trn. The forecast of the Ministry of Economic Development expects GDP growth 2011 to reach 4.2%, 2012 – 3.9%, 2013 – 4.5%. In January 2011 The Ministry of Economic Development estimated the annualized economy growth at 4.3%.