Nabiullina expressed confidence in the growth of the Russian economy in 2025

The Central Bank of the Russian Federation (CBR) is confident that the potential of the Russian economy will continue to grow in 2025. This was stated by the head of the regulator Elvira Nabiullina at the VTB forum "Russia Calling!" on December 4.

"Central Bank staff, economists, believe that the economy's potential is growing and will continue to grow next year. This is the result of large-scale investments of the last three years in the modernization of the economy," she pointed out.

Nabiullina noted that a powerful tool to fight inflation is the key rate. And this year, with the help of this tool, the Central Bank of Russia managed to "prevent the economy from entering an inflationary spiral."

"Inflation has not started to slow down yet. This year inflation will be higher than next year, unfortunately. But the braking path to our target will take all of next year and even tack on 2026. <...> [Since 2022] we have been running a loose monetary policy, and we ran it until the economy fully recovered. And then inflation took a completely different nature, related to the overheating of demand," the head of the regulator specified.

According to Nabiullina, after four years of elevated inflation in the future, the regulator must answer the question of whether the monetary policy it pursues is tight enough for inflation to finally "return to the target."

"We have signaled that the Central Bank allows the possibility of a rate hike, but I want to draw attention to the fact that it is not predetermined," she pointed out.

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Economists discussed the prospects for fighting inflation and lowering the interest rate

Prior to that, on December 2, VTB Bank head Andrei Kostin said he considered the Bank of Russia chairwoman to be bold and compared Nabiullina to former British Prime Minister Margaret Thatcher, the "Iron Lady," who also actively fought inflation. According to Kostin's assessment, if inflation starts to fall, the Central Bank will have to sharply reduce the key rate in 2025.

Earlier, on November 28, Kirill Tremasov, Advisor to the Chairman of the Bank of Russia, said that the regulator will consider the issue of raising the key rate at a meeting on December 20. At the same time, Deputy President - Chairman of the Board of VTB Dmitry Pianov said that the bank's analysts predict an increase in the key rate to 23%.

On October 25, the Board of Directors of the Central Bank of Russia raised the key rate to 21%. Then, on November 19, Nabiullina said that if Russia does not face additional economic shocks, the regulator will be able to start lowering the key rate in 2025.