Russia's Central Bank said Monday that it was likely the economy would contract in the first quarter of next year and perhaps by around 4.5 percent in 2015 as a whole if oil prices average $60 a barrel.
The bank also said in a monetary policy document that capital outflows in the fourth quarter would rise to levels comparable with those in the first quarter and forecast significant outflows for the next three years.
The outlook for Russia's economy has darkened considerably since the summer, as falling oil prices, Western sanctions over Ukraine and a slowdown in capital investment have pushed the country toward recession.
A major casualty has been the ruble, which is down some 45 percent against the dollar so far this year.
The Central Bank has also had to hike its main lending rate by a cumulative 5 percentage points in response to market turmoil linked to the Ukraine crisis.
The Central Bank said Monday that inflation could peak at 11.5 percent early next year and that reaching its mid-term inflation target of 4 percent by the end of 2017 would require keeping monetary policy tight next year.
The bank predicted capital outflows of around $120 billion next year, $75 billion in 2016 and $55 billion in 2017.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
