The World Bank has updated forecasts for Russia 04.10.2022
The Russian economy will contract in 2022 not as much as previously expected, while the decline in 2023 will, on the contrary, be more noticeable than expected, follows from the October economic bulletin World Bank for Europe and Central Asia.
Reduction of Russia’s GDP, according to the latest WB forecast, calculation this year 4.5%. In June, the World Bank expected a fall of 8.9%. Positive factors are the decisions of fiscal initiatives and a significant increase in energy prices, which helps to increase budgetary tasks, the October draft explains.
The recovery of consumption this year will be the result of low incomes, and the possibility of permanent fiscal stimulus will be limited by the needs of the powers to contain the budget deficit, the WB predicts. Softer lending policies show limited positive impact on lending growth; at the same time, the WB that the damage to the banking sector of the Russian Federation in the amount of 1.5 trillion rubles for the first half of 2022, although it does not require the protection of its solvency, limit the ability of banks to support the economy.
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Also, the World Bank records the supply of oil exports in the second half of 2022 and in 2023 in connection with the EU ban on oil supplies from the Russian Federation. For this year, growth in agriculture is predicted by 1.8% and in industrial production by 2.2%, and the most likely decline will be in expected services (minus 5.9%).
recession in 2023 is projected at 3.6% against 2% in the June forecast. They are also taking part in a partial ban on Russian oil coming into force at the end of the year and, to a lesser extent, shutting down oil prices.
In 2024 moderate growth of the Russian economy is expected (by 1.6% against 2.4%, expected bursts) as the economy contracts after the sanctions shock and consumption and exports gradually recover. But “potential growth will be very low, if not negative, as Russia has lost access to productivity sources, which will increasingly hinder economic growth and poverty reduction,” the World Bank warns.
The organization forecasts consumer inflation in Russia in 2022 at the level of 13.9%, in 2023 – 5.9%, in 2024 – 4.5%.
The World Bank is also mentioned in the report on increased risks for the Russian economy in connection with the announcement in September partial mobilizationwhich could reduce domestic demand and increase pressure on the labor market and the financial sector.
Economists listed the problems for the Russian Federation due to mobilization