WB cuts Russia’s GDP growth forecast to 1.4%

The World Bank has revised its forecast for growth this year slightly downwards to 1.4% from 1.5%. For comparison, both the government and the OECD expect growth to slow to less than 1.4% this year. The downward revision was prompted by low oil prices, the WB said in its Europe and Central Asia Economic Update. The forecast for 2020 is unchanged, as the WB expects growth to pick up pace to 1.8%, and the same is expected also in 2021. Last year, Russia’s GDP grew by 2.3%, much faster than the 1.6% predicted by the WB. This was mainly due to one-off effects in non-housing construction, said the WB.

Inflation is expected to jump from 2.9% last year to 5.2% this year and then to fall to 4.0% both next year and in 2021. Debt is expected to rise to 14.8% of GDP this year from 14.3% last year, and to keep rising to 16.5% by 2021. The CA surplus is expected by the WB to narrow from 6.9% last year to 6.2% this year and to keep narrowing to 4.6% by 2021. The WB said downside risks stem from sanctions, deterioration in financial market sentiment, and a drop in oil prices.

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