The Russian central bank may consider interest rate cuts in upcoming meetings.

The degree of fiscal policy easing over the next three years will exceed previous expectations. This means that the path of key interest rates may need to be higher than the levels preset in the April baseline scenario. Although inflation expectations among households and businesses have declined somewhat, they remain elevated overall. After a brief dip at the beginning of the year, economic growth has maintained a moderate expansion trend. High-frequency data indicates that economic activity indicators weakened in the first quarter and rebounded in the second quarter, in line with earlier forecasts. Labor market tightness continues to ease, but the pace remains slow. The monetary environment remains marginally accommodative, yet is still generally restrictive. Over the medium term, upside risks to inflation continue to outweigh factors that might suppress inflation. In the short term, a decline in motor fuel output has further increased inflationary risks.