World Bank preserves forecast for 1.5% GDP growth in Russia

The World Bank preserved its GDP growth forecasts for the Russian economy at 1.5% in 2018 and 1.8% in 2019-2020, according to the bank’s Global Economic Prospects report published on Tuesday. This is unchanged from the May report of the WB on the Russian economy, but a slight downgrade from the January Global Economic Prospects report when the WB expected GDP growth of 1.7% this year. The outlook balances the effects of higher oil prices and monetary easing with production cut and geopolitical risks. We note that most IFIs (IMF, OECD, EC) currently forecast slowdown of GDP growth next year, but this is partially due to relatively optimistic forecasts for 2018, which are likely to be revised downward after the weak start of the year. GDP grew by 1.3% y/y in Q1 and the EconMin plans to revise its annual forecast down to 1.6-2.1% from 2.1% previously.

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