Analysts polled by the Central Bank of Russia raised their forecast for this year's inflation to 7.1%, from 6.6%, in a survey the bank published on 14 October1. They now expect the key rate, the bank's benchmark interest rate, to average 12.8% next year, up from 12.4%. They see the consolidated budget deficit at 3.7% of gross domestic product (GDP) this year, from 3.5%, and 3.0% next year, from 2.6%.
The same analysts raised this year's oil price assumption to $70 a barrel, from $64, yet still widened their deficit forecasts2. If oil earns more and the deficit grows anyway, the analysts expect spending to outrun revenue. Russia's Finance Ministry is gloomier on oil: it has already cut its own oil and gas revenue forecast for the year. The analysts' deficit figure includes regional budgets, so it does not compare directly with the ministry's federal plan.
The bank held its rate in September and named fuel prices as an inflation driver. It meets again on 23 October, and the analysts' forecast implies the rate staying at 14% for the rest of the year, The Moscow Times reported3.
