The president, Vladimir Putin, is expected to adhere to the constitutional ban on a third term in office and to step down in 2008. His successor will come from a small circle of loyal officials. Political rivalry in the run-up to the election is likely to be closely managed. Little change in policies is expected in the post-Putin era. Real GDP growth will decelerate moderately over the remainder of the 2007-08 forecast period, but high oil prices will continue to underpin a strong expansion in domestic demand and limit the extent of the output slowdown. Inflationary pressure should ease in 2008 but will still remain a concern. The rouble will continue to strengthen in real effective terms. The current-account surplus is projected to narrow to less than 5% of GDP in 2008.