Feb. 2 (UPI) -- Though oil prices are flirting with historic highs, growth in Russia's gross domestic product won't reach 2 percent in the near term, the Central Bank said.
Russia's Central Bank said Friday that year-over-year growth during the first half of the year won't accelerate much, even after its economic development minister said in January that GDP growth could hit 3 percent with the right policies in place.
"The first half of 2018 is expected to see a further recovery of industrial activity, while annual GDP growth is estimated at 1-1.5 percent," a bank statement carried by Russian news agency Tass read.
Russian Economic Development Minister Maksim Oreshkin in January said a growth rate of 3 percent was possible provided a "whole number of changes" take effect this year.
Russia is party to an agreement led by the Organization of Petroleum Exporting Countries to offset supply-side strains by trimming production. Russia is the largest contributor among non-OPEC members.
Central Bank Gov. Elvira Nabiullina said last year the economy was "very close" to its target of reducing inflation from 7 percent to as low as 3 percent, but the overall situation remained "volatile."
She said after the OPEC-led effort was brokered in late 2016 that recovery for the Russian economy would be slow with only minor growth for GDP. In a rate policy statement from June, the bank said GDP should grow between 1.3 percent and 1.8 percent in 2017, an improvement from recessionary strains from 2016.
In the third quarter, Russian GDP increased 1.8 percent, its second highest level in three years. GDP growth is expected at around 1.8 percent for the year.
The price for Brent crude oil in June was in the mid-$40 per barrel range. The price was closer to $70 per barrel early Friday.
Russia relies heavily on oil and gas revenue to support its economy. OPEC economists in their latest market report said preliminary supply from non-OPEC members in December averaged 58.6 million barrels per day, supported by incremental gains from Russia.