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:

Demographic call-up Capitalization in Russia Foreign parents for Russian children Vimpelcom Posts Q4 2013 & Full 2013 Financials Abkhazia one of the most beautiful health-resorts is still in war ruins

Comment on our site

RSS   twitter   facebook   submit

Bookmark and Share

search on the map
Russian economy  Glassware  Russia composers  May 9  Evgeny Zhirkov  Russian business  Moscow Theatres  Elena Obraztsova  Russian parliament  Russian history  Transaero  Katya Dobryakova  Peter and Fevronia  Festivals in Moscow  St. Petersburg  Yegoryevsk  Perm Territory  New Films  Makhachkala  Russian religion  volunteer squads  FIFA world cup 2018 tickets  Moscow  Dmitry Pozharsky  Russian National Parks  Documentary Film Festival "Russia"  Taltzy  Konstantin Khabensky  Amur Region  Mercedes-Benz Fashion Week Russia  Moscow events  bus tickets Russia FIFA  Russian transport  Satellites  Conservatory Ball  Russian aviation  Travel to Finland  Orthodoxy  Andrey Bartenev  Russian Literature  business  Gorno-Altaisk  Russian tourism  The Russian Military Historical Society  Federation Cup  Primorye  Photo Biennale  Voronezh   Exhibitions in Moscow  Russian Cinema 

Travel Blogs
Top Traveling Sites