Overheating of Russia's economy continues to slowdown in second quarter, could end in third quarter - Central Bank

MOSCOW. Aug 6 (Interfax) - The positive output gap in the Russian economy [overheating] continued to decline in the second quarter and may close completely in the third quarter if current trends continue, the Central Bank of Russia said in its key rate discussion published on Wednesday.

"The participants concluded that in the second quarter, the economy's upward deviation from the balanced growth trajectory [positive output gap, or overheating] continued to decrease. This is indicated by a decrease in inflationary pressure, a slowdown in domestic demand growth, signs of a decrease in tensions in the labor market and normalization of production capacity utilization, as well as model estimates of the output gap," the regulator said.

"Meantime, some participants in the discussion noted that the positive output gap may close completely already in the third quarter if current trends continue," the Central Bank said.

As reported, the peak of overheating in Russia's economy passed in the fourth quarter of 2024, then entering a cooling phase, according to the Central Bank's estimates.