Moscow - The European Bank for Reconstruction and Development (EBRD) has slightly improved its forecast for Russian GDP growth this year to 3.2% from 3.1%, the bank said in a report on the prospects for the development of countries where the EBRD has a presence.
The EBRD GDP growth forecast for next year remains at the 3.3% it was projecting in July, when the bank significantly lowered its forecast for Russian economic growth both for 2012 (from 4.2% to 3.1%) and for 2013 (from 4.3% to 3.3%).
Russia’s Economic Development Ministry expects GDP to expand 3.5% this year and 3.7% next year.
The general forecast for the region where the bank is present in 2012 and 2013 remains unchanged. The EBRD figures economic growth in these countries will slow on average from 4.6% in 2011 to 2.7% in 2012, but increase to 3.2% in 2013. The Eurozone crisis continues to have a negative impact on the economic indicators of this region, the bank says. But, thanks in particular to recent moves by the European Central Bank, these risks to growth have somewhat abated.
For most of the countries in Central and Southeastern Europe, as well as Ukraine, Moldova, Kyrgyzstan, and Azerbaijan, the EBRD has lowered its forecast for 2012. The forecasts for Egypt, Uzbekistan, Kazakhstan, Turkey, Georgia, Belarus, Armenia, and Russia were revised upwards.
The slowdown in Russian economic growth continues, the EBRD says. This shows the effect the slumping world economy is having on the country, as expressed in a weakening of external demand, and more and more often a downturn in domestic demand is observed.
Weak demand on the part of the Eurozone has a knock-on effect on growth in countries with developing markets. The drop in global demand for primary commodities restrains prices for raw commodities, and this factor directly impacts economic growth in Russia, the bank says.
Output growth in Russia’s five core economic sectors slowed 1.9% year-on-year in August 2012, which reflects a reduction in industrial output and a contraction of agricultural output due to less-than-favorable weather conditions. Retail sales growth, which remained at around 7% during the first half, also slowed to 4.3% in August. The net outflow of capital amounted to around $57 billion in January-September. Political and economic uncertainty continues to have an effect on the country’s investment climate, the EBRD report says.
