Russian capital flight decelerates dramatically – central bank

Outflow of capital from Russia decreased more than sixfold in 2023 compared to the previous year, according to the head of the country’s central bank, Elvira Nabiullina.

Speaking at the State Duma on Thursday, Nabiullina noted that the Russian economy had recovered from the impact of sanctions much faster than all forecasts had predicted. Furthermore, the economy continues to grow, she added.

According to Nabiullina, economic output, consumption, and investment in fixed capital have all rebounded. The weakening ruble and inflation, she surmised, cannot be blamed on capital outflow but are the results of changes in the balance of trade.

“We had to act decisively to prevent an inflationary spiral from unwinding, so as not to undermine the growth of real incomes of the population … By raising the rate to 15% in October, we also took into account the new parameters of fiscal policy. They suggest a more expansionary fiscal policy,” the head of the regulator stated.

The Bank of Russia’s has projected that inflation in 2024 will return to the targeted 4%, subsequently paving the way for the gradual reduction of the key interest rate.

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