The economy moved to recovery in June

In may, the Russian economy has passed the lowest point of the recession associated with the negative consequences of the pandemic. Operational indicators confirm that in June and early July, the pace of recovery economic growth has accelerated, it is noted in the next issue of macroeconomic Bulletin “as evidenced by trends,” prepared by the Department of studies and forecasting of the Bank of Russia.

After stabilization at a reduced level in may and the first half of June, during the last weeks of business activity shows distinct signs of growth. The key factor in improving economic dynamics supports domestic demand, while external demand is recovering much more slowly on the background of maintaining a high level of uncertainty in the global economy. However, the implementation of the secondary effects of the restrictive measures, the fall in demand combined with longer-term changes in models of consumer behavior, as well as the preservation of low level of production and processing of oil predetermine gradual and uneven the further recovery of the economy, the authors of the Bulletin.

In June, annual inflation accelerated slightly (to 3.2% from 3.0% in may) under the influence of the low base of the second half of last year. In June the prices of various categories of goods and services showed multidirectional dynamics due to the combined effects of several factors on the demand side and supply. According to the authors of the Bulletin in the coming months, likely saving the offset of the balance of risks to the disinflationary side. Loose monetary policy will contribute to the stabilization of inflation near the target of the Bank of Russia in the medium term.

The conclusions and recommendations contained in the Bulletin may not necessarily reflect the official position of Bank of Russia.