Central Bank vs CAMAC: Who’s right about Russia’s economy?

The author of the Resurgam channel explain this.

The Central Bank, led by Elvira Nabiullina, cut the key rate from 21% to 20%, citing signs of a "soft landing" and "stabilizing inflation." But a new report from the Kremlin-linked Center for Macroeconomic Analysis and Short-Term Forecasting (CAMAC) painted a darker picture: “Moscow is diving into stagflation,” with slowing growth and high inflation.

So who's right — Nabiullina or the analysts behind the report, led by Andrey Belousov?

While the ruble’s recent strengthening, driven by hopes of reduced sanctions and lower imports, has cooled annual inflation from 10.5% to 9.7%, the Center argues this is still far above the Central Bank’s 4% target. It also notes that inflation tends to rise in the second half of the year due to seasonal pressures and looming utility price hikes.

Resurgam criticizes the rate cut as ineffective. A 1% drop doesn’t help, the report says, noting that few companies can afford loans at current rates unless they’re already receiving government-subsidized financing.

Resurgam also warns the Central Bank might be forced to raise rates again soon due to ruble devaluation, rising tariffs, and falling oil prices. The third and fourth quarters could bring a weaker ruble and growing inflation, the report says.

Belousov offered a bleak forecast: the wage race is ending, household income growth is slowing, and a chain of unpaid debts may begin. He warned that inflation is likely to pick up again in the second half of the year, and the Central Bank may reverse its rate cut under pressure.

In short, while the Central Bank sees signs of stability, Resurgam argued the rate cut is more political than economic — and that a crisis may be just around the corner.