World Bank cuts Russia's economic forecast
The World Bank predicts that the Russian economy will shrink 1.9%, a poorer estimate than the December forecast which estimated a dip of only 0.7%.
The worsening of the forecast is due to a revaluation of oil prices for 2016. In the previous forecast the bank assumed that the average oil price would be 49 dollars per barrel. According to the bank’s new estimates, the average oil price this year will be about 37 dollars per barrel.
The new WB forecast also anticipates 1.1% growth in the Russian economy by 2017, compared to an earlier estimate of 1.3%. The same report predicts that poverty in Russia will be at its highest point since the crisis of 1998-1999. Bank experts also presume that the Russian budget deficit will exceed the planned 3% this year.
Earlier, the international rating agency S&P reported that a 1.4% decline in GDP in the Russian Federation could be expected in 2016. The report of the Center of Development of the Higher School of Economics published in February states that the Russian GDP now corresponds to the first and third quarters of 2008 and is likely to continue to decline.