In the second quarter of 2017, global GDP recorded its highest reading since the end of 2010. This acceleration was broad-based: economies in the United States, the Euro Area, Japan, Eastern Europe, and Central Asia strengthened.
Oil prices firmed to nearly $55/bbl in mid-September, due to hurricane-induced supply disruptions in the Gulf of Mexico, and news of lower-than-expected supply rises in the U.S., including due to a temporary halt in the upturn in U.S. shale drilling.
After buoyant growth in the second quarter of 2017, economic activity in Russia slowed down in July on the back of weak manufacturing performance.
A sustainable slowdown of inflation led to the Central Bank cutting the key policy rate by 50 pp to 8.5 percent on September 15.
In the first half of the year, the federal budget primary balance reached zero supported by oil price dynamics, improving from the deficit of 2.4 percent of GDP observed in the same period last year.
While the authorities have undertaken a number of legal and regulatory measures to increase the resilience of the banking system, preserving its stability remains a key challenge given a number of recent failures of some large banks, including that of the largest private and systemically important bank, Otkritie.
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