Russia’s economic growth is slow and may stagnate over the next two years, according to a World Bank study published Wednesday.
The bank says Russia’s economic growth may be just one-half of one percent this year — and forecasts it may be slightly slower in 2015 and 2016.
The bank’s new Russia Economic Report highlights geopolitical uncertainty — clearly a reference to Moscow’s actions against Ukraine – and uncertainty about the Kremlin’s economic policies as key factors in the country’s economic slowdown.
The World Bank estimates are more pessimistic than forecasts prepared by Russia’s government. Experts at the global lender said they are skeptical of the Kremlin’s assumptions about future investment growth.
The lead author of the World Bank report, Birgit Hansl, also notes there has been little movement on structural reforms in Russia, so its economic outlook over the medium term — through 2015 — is pessimistic. Bank economists have recommended better management of Russia’s public finances, improvements in education and infrastructure, and greater efforts to encourage competition within the economy.
The forecast assumes there will be no further sanctions against Russia related to the Ukraine crisis, so if that conflict worsens, Russia could slip into recession.
Western nations have imposed a series of economic sanctions to punish Moscow for its actions in Ukraine, and Russia has retaliated with some sanctions of its own.
(Photo: Victor Fofanov/sxc.hu)