Russian central bank warns of slower economic growth risks

Russia’s central bank warned on Thursday that economic growth may slow down in the country, despite the current balance between inflationary and slower GDP growth risks. “Today the balance remains but the risks of assessing economic growth are rising,” Central Bank First Deputy Chairman Alexei Ulyukayev said. “It seems that the risks of slower economic growth have slightly increased lately. In any case, the IMF has downgraded its Russia forecast and some investment banks are also reviewing their forecasts downward,” Ulyukayev said. The International Monetary Fund has downgraded its forecast on Russia's gross domestic product in 2011 to 4.1 percent from 4.3 percent. The IMF also cut its forecast on Russia's GDP growth in 2012 to 3.5 percent from 4.1 percent, saying there were considerable risks for the forecast's further downgrade, if world oil prices fell and the debt crisis continued to worsen in the eurozone. Russia's Economic Development Ministry expects the country's 2011 economic growth at 4.1 percent and 3.7 percent in 2012. As for consumer price inflation in Russia in 2011, the IMF predicts it to be below 7 percent as reduced liquidity will help curb inflation growth. Capital outflow from Russia hit an estimated $74 billion in January-November 2011, including about $10 billion in November, Ulyukayev said. “Capital outflow of $85 billion is theoretically quite possible this year,” he said, adding that the regulator had predicted capital flight at $70 billion this year.