Morgan Stanley improves Russia’s 2015 GDP forecast from -5% to -4.2%

By bne IntelliNews July 13, 2015

US investment bank Morgan Stanley improved Russia's forecasted GDP growth in 2015-2016 amid partially recovered oil prices and easing of monetary policy that started earlier than expected, the bank said on July 10. Projected GDP decline was improved from -5% to -4.2% in 2015, and from -1.8% to -1.2% in 2016.

A stronger than expected net exports due to a sharp weakening of the ruble also added to a more optimistic prognosis. Morgan Stanley's new oil price guideline for 2015 is $62 per barrel, for 2016 - $67 per barrel. Inflation in Russia in the middle of 2015 will be at 15.2% and at 12% by the year-end, the forecast said.

The bank's experts also believe that the Central Bank of Russia (CBR) will lower the key interest rate by 250 basis points to 9% before the end of the year, and by another 100 basis points in 2016. They expect the regulator to lower the interest rate from 11.5% by 50 basis points at the next meeting of CBR's board of directors set for July 31.

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