The country’s economy is starting to grow at a pace beyond its capabilities. According to the top manager, its main capacities are loaded up to 84 percent, the limit above which it is “simply impossible” to move. Huge amounts of money are flowing into the economy through the budget impulse, which, together with the credit impulse, cause a consumer boom and lead to price increases.
For the first time, the Central Bank indicated that the economy has exceeded its potential level in the September analytical review “What the trends say”. In December, after the key rate increase, the chairman of the regulator, Elvira Nabiullina, compared the Russian economy to an overheated car engine using all its resources at full capacity.
Alexey Zabotkin, Deputy Chairman of the Bank of Russia, said that overheating in the Russian economy creates stable inflationary pressure, which will stop when supply catches up with the prevailing level of demand. According to the representative of the Central Bank, we are talking about a situation when “the potential of the economy, its production capabilities will catch up with the level of demand that the economy has reached.”
