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The world Bank has lowered its forecast for Russia’s economy

Всемирный банк ухудшил прогноз по экономике России

The world Bank downgraded the dynamics of Russia’s GDP in 2016. The international organization expects the economy to contract by 1.9 per cent instead of 0.7 per cent projected earlier. This is stated in an April world Bank report.

Also a more pessimistic forecast of growth of Russian economy in 2017: he is expected to be within 1.1 percent, not 1.3 percent, as previously assumed.

Pessimistic scenario the world Bank provides for a reduction in the average price of oil this year to $ 30 per barrel. In this case the Russian economy will be 2.5 per cent. In 2017, oil prices could rise to $ 40 per barrel, and in 2018 — to $ 45. This will allow GDP to grow by 0.5 percent in 2017, and in 2018-m — 2 percent.

Under all assumed scenarios, this year is expected to further increase in the poverty rate. “The projected growth of poverty in all scenarios, partly due to the strong negative carry-over effect of sharp decline in real income in 2015 in conjunction with the continuing deterioration in employment of the population”, — stated in the report.

Real wages will decline due to high inflation, along with zero indexation of salaries in the budgetary organizations and pension indexation below inflation.

On 30 March the Center for development HSE has published a forecast according to which Russia’s GDP will shrink in 2015-2019, a total of 8.1 percent. HSE experts noted that the current trend “prevent the departure of the economy from the current depressing trajectory”. In addition, they predicted the reduction of public sector wages by 30 percent.

In 2015, the Russian economy contracted by 3.7 percent. According to the forecast of Alfa-Bank, in 2016, Russia’s GDP will fall by 1.5 percent. The IMF expects to reduce by 1 percent.

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