MOSCOW, Oct 2 (Reuters) - Russian Prime Minister Dmitry Medvedev expects modest growth in the economy early 2017 and said the country’s inflation rate for 2016 might hit its lowest in recent history.
The Russian economy has struggled following the introduction of international sanctions against Moscow in 2014 over its role in the Ukraine crisis. This effectively shut the country out of the Western debt markets.
“We understand the conditions in which our economy has been developing. It, unfortunately, was cut off from the foreign source of financing and from a variety of foreign suppliers,” Medvedev said in an interview with Russia’s First TV Channel.
But he said that the negative trends in the economy over the past two to three years will “exhaust themselves by the year-end.” He said a fall in inflation to its lowest in recent history would help the government to promote further economic development.
According to a Reuters poll, Russian inflation will fall to just over 6 percent by the end of the year as monetary policy is kept tight, but next year the central bank will struggle to meet its 4 percent inflation target.
Russian consumer price index stands at 6.9 percent.
Gross domestic product in Russia is expected to fall 0.5 percent this year before returning to 0.8 percent growth in 2017, according to government forecasts. (Reporting by Vladimir Soldatkin. Editing by Jane Merriman)