Add to favorite
Subscribe to our Newsletters Subscribe to our Newsletters Get Daily Updates RSS
russian visa

Economic Forecasts
September 25, 2014 16:01


 On Tuesday, experts from the World Bank revised Russian GDP growth forecast from 1.1 to 0.5% and increased inflation expectations for the year down to 8% (the latest forecast of the Central Bank is 7.5%). In the future, the projected growth of the economy in line with the baseline scenario of the international credit organizations will be even lower: 0.3% in 2015 and 0.4% in 2016.

The economy is on the eve of the recession, World Bank economists wrote in their report. According to experts, the main reason for the decline in economic growth has been a sharp decline in investment demand and consumption growth. The increased tensions between Russia and Ukraine and related sanctions directly affect investment and consumption decisions, experts believe.

Besides that, the consumption was influenced by such factors as the ruble devaluation and the increase in inflationary pressures. In the future, the expansion of sanctions will lead to even more significant reduction in domestic demand, which now still remains the main driving force of the economy, experts acknowledge in their report on the state of the Russian economy.

On the other hand, as a result of changes in the geopolitical situation, still incomplete review of mid-term objectives of economic policy prevents the further growth of the economy, experts warn. Experts see the recipe for the revival of the Russian economy all the same: predictable economic conditions and new development model based on diversification. Earlier, Bank of America, Merrill Lynch and HSBC downgraded forecasts for growth of the Russian economy. "If we expect that sanctions will be expanding, we will not be limited to those levels, of which the World Bank says. The effect of the food sanctions imposed by the Central Bank is estimated at 1.5%, expecting that it will be distributed proportionally this and next years. If the effect will come this year, inflation could exceed 8% of those of which the World Bank said, and if sanctions are expanded, the positive economic growth may become for us quite an optimistic scenario," Sberank’s chief economist Yulia Tseplyaeva said.

According to the World Bank experts, measures to stabilize the macroeconomic situation, adopted by Russia in response to geopolitical changes were "timely and successful", but some of the other predictions of the authorities are not so good. In particular, according to experts, the Russian government overestimates the ability to increase productivity: there is a significant growth potential in the food industry, where the productive capacity is used by 60%. Increasing productivity in other sectors requires substantial investment. 

Author: Anna Dorozhkina

Tags: Russian economy     

Next Previous

You might also find interesting:

Russia And India Strengthen Cooperation To Counter Terrorism Central Bank Will Not Support Rouble 5 New Parties Registered in Russia Banks' Bailout Blueprints To Battle Big Trouble Top 3 Most Absurd Sanction-Defying Proposals

Comment on our site

RSS   twitter   facebook   submit

Bookmark and Share

search on the map
Exhibitions in Moscow  Andrei Chokhov  Sakhalin  Pavel Pogrebnyak  travel to Russia  Modern Art  Alexander Kitayev  Festivals in Moscow  Ice Palace  Russian Cinema  Concerts in Saint Petersburg  Belokurikha  Russia Travel Tips  St.Petersburg Museums  Russian Artist  Mariinsky theatre  Russian tourism  Kamensk-Uralski  Alexey Navalny  Mikhail Bulgakov  Moscow  Innoprom  Pushkin Museum of Fine Arts  Norilsk Nickel  Maxhosa by Laduma  Russian regions  Russian business  Science  Zadonsk  St. Petersburg  Active Travel  Numismatics  Russian poet  Mercedes-Benz Fashion Week Russia  Moscow fairs  Russian football  Sochi Olympics  Zenit St. Petersburg  Concerts in Moscow  Russian Film Directors  Golden Mask  Russian laws  experiment  Russian scientists  Skype in Russia  Russian arms  ENEA  Faceted Chamber  Russia tours  Inta 

Travel Blogs
Top Traveling Sites