Output gap in Russian economy probably narrowed in Q1, but economy still considerably overheated - Central Bank

MOSCOW. April 2 (Interfax) - The Russian economy probably became less overheated in the first quarter of 2025 but it is too soon to talk about a sustainable trend or that it is cooling down quickly enough to meet the target in 2026, the Central Bank said in the summary of its latest key rate discussion published on Wednesday.

"The discussants concluded that in the first quarter of 2025, the positive output gap in the economy [overheating] had probably begun to narrow: current inflationary pressure is decreasing, domestic demand growth is slowing, and there are signs labor market tension is easing," the summary says.

"But it is still premature to talk about a sustainable reduction of economic overheating or that this will cool quickly enough to return inflation to the [4%] target in 2026. The positive output gap in the economy remains significant," the Central Bank said.