Russia Prepares for Worst Case Inflation Scenario

Russia’s central bank has released monetary policy guidelines for 2025-2025, outlining four possible scenarios for the country’s future. The baseline scenario predicts no new shocks, with inflation expected to decrease to 4-4.5% by 2025. The disinflationary scenario foresees increased investment and productivity, leading to faster GDP growth and lower inflation. Conversely, the pro inflationary scenario anticipates rising business costs and inflation due to tight labor market conditions.

In the risk scenario, similar to the 2008 global crisis, Russia might face more sanctions and a drop in oil prices. Under this scenario, the central bank may raise the key rate to 20-22% in 2025, with inflation potentially reaching 13-15%. Overall, Russia’s economy is expected to experience varying levels of growth and inflation depending on the scenario.

The baseline scenario indicates economic stability, while the other scenarios present potential challenges and opportunities for Russia’s economic development. It is crucial for policymakers to consider these scenarios and prepare for different outcomes in the coming years.

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