Russia’s economic outlook has improved and its economy is set to grow, the World Bank (WB) said on Wednesday.
In 2016, Russia’s gross domestic product (GDP) will contract by 0.6%, which is better than its April prediction of 1.9%.
“In 2016, the economy is projected to contract by 0.6%, and grow by 1.5% in 2017 and 1.7% in 2018, as hydrocarbon prices are forecast to continue recovering and positively affect domestic demand,” the World Bank said.
Earlier, in April, the international lender predicted 1.1% growth in 2017. The bank’s revised outlook for the next year is also better than the Russian central bank’s forecast for growth of less than 1%.
The estimates are based on an average of USD55.2 per barrel in 2017 and USD59.9 in 2018.
“This growth upsurge, however, is unlikely to turn the tide in terms of building a more diversified economy,” the World Bank said in its report.
Russia’s budget deficit is predicted at 4.2% of the GDP in 2016, 2.2% in 2017 and 0.6% in 2018, suppressed by spending reduction.
Inflation will amount to below 6% in 2016 and will reach the target of the Russian central bank of 4% in 2017. As a result, consumption will rise 2% in 2017 and 1.6% in 2018, the World Bank said.
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