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Current growth statistics could paint a more negative picture on Russia’s economy than the country’s performance and investment landscape deserves, according to the latest Outside the Box report by Novosibirsk-based finance group BCS Global Markets.

Russia’s economic performance is in a strong position overall, despite current GDP figures, which – as seen in previous years – could be revised up, suggests the report, the second of its kind in collaboration with leading Russian analysts Alexander Kudrin and Evgeny Gavrilenkov.

“Declining consumer demand and Russia’s so-called two-tier economy – whereby banks, mining companies, and the government perform considerably better than other economic sectors – continues to be a weakness for the Russian economy,” the report says.

According to the document, declining consumer demand and Russia’s so-called two-tier economy – whereby banks, mining companies, and the government perform considerably better than other economic sectors – continues to be a weakness for the Russian economy.

However, BCS and Gkem Analytica argue that falling inflation and the strong fiscal position of the treasury will facilitate government action that supports economic growth. Less hawkish macroeconomic policies and increasing and reprioritizing government spending has the potential to kick-start sluggish domestic consumption.

On Wednesday, economic development minister Maxim Oreshkin said inflation in Russia is slowing down faster than expected and will drop to be about 3.6 percent at the end of this year.

“Now we see that inflation will be below 4 percent – the target value – in early October and will go down somewhere to 3.6 percent this year and below 3 percent in the first quarter of next year. It is reducing even faster than the expectations that I voiced in July this year,” Oreshkin said at a meeting of Russian President Vladimir Putin with government members.