The restraining influence of low economic activity will begin to fully impact inflation dynamics in the second half of 2015. By this time, the effect of temporary factors, such as the depreciation of the ruble and foreign trade restrictions that have led to acceleration in consumer prices growth, will be exhausted. As we have already noted, inflation will reach its peak in 2015 Q2, and afterwards it is forecast to fall. In March 2016, inflation will approximate to 9% before falling down to 4% in the medium run. Such inflation dynamics will be accompanied by economic recovery. The bottom of economic recession is expected in 2016 Q1, later on the economy will start growing on a quarterly basis. By that time the initial adjustment of the economy to the new environment will be over. Higher global oil prices, the economic recovery of trade partner countries, and the formation  BIS central bankers’ speeches  3  of new sources of financing will also contribute to this growth. In 2017, economic recovery is expected to exceed 6%. We shall continue to regularly update our forecast by monitoring movements of a wide range of indicators taking into account not only annual inflation dynamics, but also quarterly, monthly and weekly ones. If new pro-inflationary factors do not appear and inflation decelerates according to our forecast, we shall continue cutting the key rate.
It should be noted, that under existing circumstances, this effect will be reinforced by accumulated high consumer debt level of certain households. 2  BIS central bankers’ speeches  Decline in investment activities is driven not only by reduced profits and lower accessibility of other financial resources, but primarily by high uncertainty with regard to future economic development. It is expected to be the highest in industries which have not benefited from the ruble depreciation and which suffer from increased debt burden. For reference: According to forecasts, household final consumption expenditure will fall by 5.5–5,7% and 1,5-2% in 2015 and 2016. Fixed capital investment will decrease by an estimated 10–12% and 0,5-1,5% respectively. As for the labour market situation, we do not expect any considerable increase in the unemployment numbers in comparison with the existing level. This is due to both the demographic factors and the specifics of the Russian labour market which normally adjusts through changes in wages and partial employment, rather than by changes in the number of those employed. For reference: According to our estimates, the unemployment will not exceed 6.0%-6.2% in two coming years. In comparison with December, we revised the balance of payment forecast. The expected fall in imports saw the most considerable change (almost by 30% in 2015 compared with 2014 instead of previous estimate of 10%). Therefore, the current account surplus estimate has been revised upward to 64 billion US dollars in 2015 and to 90 billion US dollars in 2016.