The Central Bank last quarter set its forecast for GDP growth at 5.8 percentage points, but has now raised it to 6.8 percent.
What are the forecasts for GDP?
According to the updated forecasts, the real GDP growth in 2021 is expected to be in the range of 5.8-6.8%, which is 1-1.3% higher than the initial (4.5-5.5%) forecasts for Q1.
The central bank named the key factors supporting economic growth:
- follow-up fiscal stimulation of the economy in 2021;
- recovered demand amid unchanged monetary conditions in Q4 2020 and H1 2021;
- swifter private investment as a result of ongoing structural reforms aimed at economic liberalization.
What are inflationary expectations?
The regulator left the inflation forecast for 2021 unchanged at the level of 9-10 percent.
How much will consumer spending increase?
According to forecasts, real growth in end-user spending is expected to be at 7-8 percent. In particular, household consumption expenditures are projected at 7.5-8.5%, while public expenditures are projected at 7-8%.
Real growth in consumption is due to the resurgence of deferred demand due to the pandemic and the recovery of household income.
What are the forecasts for the volume of investments?
According to forecasts, by the end of the year the volume of investments into fixed assets will grow by 13-18%, in particular, the volume of centralized investments - by 24-26%, and the volume of decentralized investments - by 10-16%.
Exports may rise relative to imports
After a sharp decline in exports (excluding gold exports) due to the pandemic last year, domestic and foreign economic activity is expected to grow 20-25 percent this year and imports 12-15 percent.