MOSCOW, July 24 (Xinhua) -- Russia's central bank on Friday cut its lending rate by 0.25 percentage point to 4.25 percent to support vulnerable sectors of the economy amid the COVID-19 pandemic.

A view of the Russian Central Bank headquarters in downtown Moscow on July 24, 2020. (Photo: AFP)

The country's gross domestic product will likely decrease by 4.5-5.5 percent this year, but the economy will recover to a growth of 3.5-4.5 percent in 2021, the bank said in a statement.

Year-on-year inflation rose to 3.2 percent in June from 3 percent in May, which was largely due to an increase in fruit and vegetable prices, it said.

Inflation will reach 3.7-4.2 percent in 2020 and 3.5-4 percent in 2021, the bank predicted.