World Bank changes outlook for Russia’s economic growth

World Bank changes outlook for Russia’s economic growth

The World Bank had changed its outlook for Russia’s economic growth rates for 2018 to 1.6% from 1.5%, according to Russia Economic Report. It expects gross domestic product to grow by 1.5% in 2019 and by 1.8% in 2020.

“In the absence of a sharp escalation of geopolitical tensions, we expect the Russian economy to continue modest growth supported by relatively high oil prices,” it said.

But circumstances for the general outlook were not favorable. "Unfavorable factors stem from the potential expansion of sanctions and continued elevated geopolitical tensions, which translate into high uncertainty that dampens domestic demand," the international financial institution said.

Russia’s international reserves, low external debt levels and its macroeconomic framework should help “limit exposure to external volatility and absorb external shocks.”

The banking sector in Russia, which saw dozens of banks losing licenses in the past few years and some bailouts of major banks by the state, remain relatively weak, the World Bank noted, adding that the banking system had sufficient liquid foreign currency assets to repay its maturing external debt, Reuters reported.

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